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Technology Stocks : Neomagic Corp. (NMGC) -- Ignore unavailable to you. Want to Upgrade?

To: Eddie Kim who wrote (2734)	3/24/1999 9:02:00 AM
From: wily	Read Replies (1) \| Respond to of 3645

Excerpts from separate articles in TheStreet.com today: Small-Caps The spread between small-cap technology and large-cap technology continues to stretch. Money has been flowing out of small-cap funds, forcing selling, and small-cap tech now means value, while large-cap tech means growth. Of course, this is a growth market, not a value market, so the more small-cap gets sold, the greater the flows out of the sector, making it a vicious circle. I was at a road show presentation last week for a secondary offering of a company that had a $500 million valuation. I half-kiddingly told the presenters that all they really needed to do was get their stock to double, and then their shares could really soar. That is, if their company sported a $1 billion valuation, then a huge set of mid-cap and large-cap funds could buy it, and it would go up every day. (Andy Kessler) thestreet.com The sad reality of specialty chip stocks is that today's star is almost always tomorrow's has-been, and investors lulled by a fast-rising stock almost always wind up getting blindsided. Just take a look at the likes of C-Cube (CUBE:Nasdaq) and S3 (SIII:Nasdaq) to see what can go wrong, or Tseng Labs and ESS Technology (ESST:Nasdaq) to see how very bad the story can get. Now a vocal chorus of short-sellers, and even a few analysts, think the same fate awaits Genesis Microchip (GNSS:Nasdaq). The Canadian company's stock came alive late last year because it was the pure play among the makers of chips for LCD flat panel PC monitors, whose sales started to sizzle last summer when the price of LCD displays started to fall. At one point they fell by as much as 50%, breaking the magic $1,000 market, making them a real competitor to regular PC monitors. Genesis was a clear winner, having grabbed more than half the market for chips that perform what is known as scaling, which scales the image up in size. There's little debate that Genesis makes a fine product. "They're headed in the right direction," says analyst J.D. Abouchar at Preferred Capital in San Francisco. "But so is their competition." And therein lies the possible problem -- especially at a company that boasts a market value of $300 million on sales that are annualizing at a mere $46 million. (That's 12 times earnings. Compare that with NeoMagic (NMGC:Nasdaq), which has more than $200 million in revenues and trades at a scant 1 times sales.) (Herb Greenberg) thestreet.com