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Technology Stocks : PC Sector Round Table -- Ignore unavailable to you. Want to Upgrade?

To: Yogi - Paul who wrote (1446)	2/18/1999 4:46:00 PM
From: Mark Oliver	Read Replies (2) \| Respond to of 2025

RE General Magic It's a confusing situation. I should think they'd be trading much higher, but they've pulled back on what seemed like very good news. There are 2 possible reasons; convertible shares conspiracy, or lack of conviction by the market that they can succeed. Both cases seem to be likely. Personally, I think they are a buy here. The convertible shares were sold last summer. They financed the roll out of Portico. This money was needed, but they seem to have set a low-end conversion price of $5. It's all in confusing legal speak, and some of these rules were changed in Jan when they asked shareholders to vote on adding new shares to the potential float. Anyway, the converts had to wait 5 months to begin conversion and then they could only convert 25% in each of the following 4 months based on market price. Well, they certainly get a bigger share of the company since the price has struck the bottom end of what they are allowed to pay. I believe the last 25% can be converted around the 20th of this month. They don't have to convert, but it appears they are doing so. So, that's the convert theory. They are shorting every rally to keep the price down. Short interest is high and doesn't really make much sense otherwise. The other side of the story is GM is faced with new announcements of things that could be coming from Lucent, maybe Siemans and perhaps Phillips. There are some small companies who have actually working systems. One is Wildfire who has the backing of Pacbel, and I'd guess SBC by proxy. There's another company called Webley. I don't think they are a great threat. General Magic is said to be in trials with about 10 wireless companies and Qwest is the first company to go to the next stage. Market trials with RBOC's are very slow. Portico is available now direct from company or through a reseller. I'd suggest you try it. It speaks for itself and it's not much to spend on stock research. Currently, today's Portico customers are really a last stage market trial. I think the system still needs to work out some bugs, but it's pretty close to ready for the big time. At some point, I'd think they'll have a new version coming. Last week, there was a big show in New Orleans called CTIA for wireless carriers. General Magic had a big announcement that they would be included into Wireless Knowledge's (Microsoft/Qualcom) new service offering that would be available by summer. This is a pretty cool announcement. The partners involved are very big. The GM product seems to have a chance to make money for GM, but we'll see. Many people like to say any deal with MSFT is bad news. MSFT is already a investor in GM, but they also invest in Wildfire. The look of their investment was that it was more agent related. They bought shares and then rights to use some agent patents, which are said to be incorporated into NT5. This again could be very valuable to GM, but it's a future that's very unclear to me. So, that's the messaging/virtual assistant Portico. The other side of the story, which was coming out of CTIA, is the convergence of Internet and wireless. They've got all sort of plans going to develop standards to take the net to a variety of mobile devices. There you have a big problem of legacy devices, weight, input and output restrictions. There are a lot of new smart phones coming that will likely be a pretty cool handheld computer. They are still wrangling out protocols and of course, it's the world against Microsoft again. So, at the moment, GM is building a voice based Internet browser. This should allow you to go to either prepared sites, and/or eventually any site and browse it by a standard phone. The Wireless Knowledge announcement said you could browse MSNBC with GM's MagicTalk, GM's Voice Users Interface (VUI). Another great value of the Wireless Knowledge agreement seems to be a secure method of interfacing with the corporate database. Probably GM can do this on their own, but the fact is it's cool to get e-mail and whatever, but the real power of the system will also be going into the VPN and interacting with SAP, or whatever. There have been real security issues, which have held back access to the firewall. Maybe this is again a development. At CES in December, Microsoft demoed their AutoPC. At this demo, they used MagicTalk to browse Sidewalk.com to find restaurant and theater information and then transmit a GPS signal for the selected sight. The AutoPC would then guide the driver to the location. So again, we see Microsoft's plan to use GM. In November, Intuit said they would offer a VUI option for their quicken.com site. This is a very active site, which would add online banking and perhaps stock trading features to Portico. Again, a huge deal in my opinion. Going forward, there are projects like Motorola's VoxML which will standardize methods of using voice to read websites. This would help MagicTalk quickly access a greater number of websites, but maybe also hurt them with competition. Not sure yet. The CEO, Steve Markman, writes a Markman Memo which describes the positioning of the company after these events. They can be very informative. genmagic.com The company in general seems to have many possibilities. It's a fascinating study to try to find all the possible outcomes that they could achieve. It seems like a great story and I'm sure if they were doing an IPO this week, the market would be killing themselves to get shares, but as it is things are stagnated. I think there is a real good short term and long-term price gain potential under $5. Let me know what you find. Regards, Mark