NMGC

[David Randolph]

I wrote what I could after a 30 minutes dig on NMGC, you can read it here: NMGC Wow !

Now I'm fully aware that Sony was no news and probably the revenue jump was in part a one time event. Even though this is true, I still see upside potential on a stock like NMGC with a market cap of just $58.44M.

This time I'm not looking for 30%, but for a 20% profit. I'll buy NMGC around the open for the 3 SOF Fast Portfolio and will take profits 20% higher. If I can't do it today I'll hold it overnight, no problem with that.

If you want it fast, you got take the risk. As always, 33.33% of the Fast Portfolio, or about $5,000.

[David Randolph]

If we push it up on pre-market the stock will go down after the open, like it happened with SPEX. I wouldn't buy on the pre-market action, liquidity is much less and that will harm the chart. A lower open is much better for a bullish continuation, right?

Let the stock open lower, and buy just at or after the open, not on pre-market, ok?

Thanks 

[danman3459]

damn!  I just entered a sell at 7.5 and of course it was exicuted before I could realize my mistake.

O well ...

[stopthemadness]

*%^$#@#!!

wow...

[huayilu]

David,

Please look at below information. It seems not good news. Price dropped 0.15 after close hours.

http://biz.yahoo.com/ap/051212/neomagic_stock_conversion.html?.v=1

NeoMagic to Convert Preferred Stock
Monday December 12, 11:13 am ET
NeoMagic to Convert Preferred Stock Into Common Shares

SANTA CLARA, Calif. (AP) -- Embedded microprocessor maker NeoMagic Corp. said on Monday it had converted its series B preferred stock into common stock.

The company said the preferred stock was converted into 869,565 common shares on Dec. 9. The company no longer has any of the series B shares outstanding, and the move wipes $3.4 million from its balance sheet that had been treated as debt.

Shares of NeoMagic, which hit a 52-week high of $9.75 on Dec. 9 after the company reported a third-quarter profit, were down 9 cents at $8.59 in morning trading on the Nasdaq after having changed hands as low as $7.55 earlier.

[stopthemadness]

David,

is there an exit strategy for NMGC.

you said you'd hold over night...  by the looks of things, it'll keep sliding in premarket.

[David Randolph]

Thanks for the info 

I already read the news, which I find neutral. There will be more common shares, but not much (more 869,565 isn't much for already 6.73 million outstanding shares), and the balance sheet will get better without that debt.

Perhaps I should have said «I'll take a 10% profit» if I see one. I had that, but obviously didn't took it, since that wasn't the plan.

The fact that the stock is opening lower today bodes well for a positive close. I still feel a $50M market cap is not enough for this company, that can have a bright future with television on handheld devices (their relationship with Sony (expressed in revenues and earnings) and others is already a big step in that direction.

I'll continue continue holding NMGC through today, and I'm not looking to let go with a 20% profit anymore, after this correction, if another leg up starts as I think it will, I want more !

[1reilly]

David
As you said the forced conversion of the conv Prf is not a negative event. Many professionals will short the common at certain levels against the long Prf position. This may actually create some buying. Also it is not a dilution because the conv stk is already carried as outstanding. The company has done this because they believe it to be in their best interest. Today's lower open should not be tied to this event. If it is then it truely is a buying opportunity. The question should be how much further profit taking will we see here.

[David Randolph]

David
As you said the forced conversion of the conv Prf is not a negative event. Many professionals will short the common at certain levels against the long Prf position. This may actually create some buying. Also it is not a dilution because the conv stk is already carried as outstanding. The company has done this because they believe it to be in their best interest. Today's lower open should not be tied to this event. If it is then it truly is a buying opportunity. The question should be how much further profit taking will we see here.

Thanks for the info 1reilly, I appreciate it 

Finally the 10-Q report for the 3rd quarter was filed with the SEC and some doubts have vanished for me:

«3.1 Payment. In consideration of the license, release and covenant not to sue provided in this Agreement by NeoMagic, Sony shall pay to NeoMagic a one-time, non-refundable payment in the amount of eight million four hundred thousand US dollars ($8,400,000) (the "NeoMagic US Payment"), and in consideration of the license, release, and covenant not to sue provided in this Agreement by NeoMagic Israel, Sony shall pay NeoMagic Israel a one-time, non-refundable payment in the amount of one hundred thousand US dollars ($100,000) (the "NeoMagic Israel Payment").

Also:

«In the third quarter of fiscal 2006, we collected licensing revenue of $8.5 million from the nonexclusive licensing of all of our patents to Sony Corporation of Tokyo, Japan. We cannot assure you that we will be able to generate any future licensing revenue from our 22 patents or from any future patents that we will own or have the right to license. The licensing agreement with Sony may be the only licensing agreement that we ever complete and we cannot assure you that we will ever complete another licensing agreement regarding our patents. Furthermore, if we should in the future complete an agreement to license our patents, we cannot assure that the licensing revenue we receive from such license will equal or exceed the licensing revenue we received from Sony.»

That's it, I'll sell around the open and take a loss for acting on mis-information. Probably I should have take the 10% profit, instead of thinking of 20%.

The 3 SOF Fast Portfolio November Edition goes on.

[shawFund]

Down 10% premarket, NMGC took private placement.

TIE is recovering.

[shipman]

Nmgc----busting a move today.......  Put it on your radar....again.  Upside breakout.

[snowcat]

Rumor of a deal on Briefing.

I think it has the bones of a TZOO. No shares, huge consistent vol, right sector.

Very long and strong.

http://stockcharts.com/def/servlet/SC.web?c=nmgc,uu[r,a]daclyyay[dc][pb5!b10!b20!c50!d20,2!h.02,.20!f][vc60][iut!Lb14!Ld21!Ll14!La12,26,9!Lm10!Lj[$spx]]&pref=G

Chart is telling me it has lots more room to go. The MACD has just turned positive.

[snowcat]

Damn! - look at this - 2 minutes before close on Friday.

15:58  NMGC NeoMagic discloses offering of up to 2.37 mln shares by selling stockholders (10.10 +0.00)
That is half of the 5.7 float!!!!!!!!!!
http://clearstation.etrade.com/cgi-bin/fundamentals?Symbol=nmgc&Event=profile&arrow.x=8&arrow.y=10
Neomagic Corp., a maker of embedded chips for use in cell phones and other wireless devices, said certain of its stockholders will sell up to 2.4 million common shares. According to a shelf registration with the Securities and Exchange Commission, the stock sale was part of an effort to regain compliance with Nasdaq Stock Market rules.

Last year, the company's shares fell below the $1 per-share minimum listing requirement. Neomagic offered a 5-for-1 reverse stock split to drive the price of its shares above $1, where the stock has stayed since the August split. A reverse stock split reduces the number of shares outstanding, bulking up the per-share value.

Shares of Neomagic logged heavy volume aftermarket, losing 78 cents, or 7.7 percent, to $9.32 on INET from a close of $10.10 on the Nasdaq

That SEC filing was for the REGISTRATION of shares sold in a private placement on December 13, 2005.  (See  this SEC filing http://biz.yahoo.com/e/051216/nmgc8-k.html )

The number of shares sold was 1.5 million with warrants to buy another 750K shares at 9 bucks.  This registration was required within 30 days of that private placement.  NMGC is merely following thru with the terms of the contract by registering those shares with the SEC within 30 days as they were required to do.   This is neither News or unexpected, however those that do not bother to read SEC filings are not aware of that. 

Here is the SEC filing today. http://www.sec.gov/Archives/edgar/data/1030485/000119312506006318/ds3.


These are NOT new shares and it is to bad NMGC did notissue a PR too this effect however I expect they did not expect Briefing.com to highlight that filing two minutes before the close.  I suspect that  Briefing.com (or their writers) may be short NMGC as each time it got close to falling before 10 this week they quickly put out an InPlay spiel about support levels and the next support to watch.  Likewise they are prone to pumping stocks they are long

[rickjust]

    hi,
the chart concurs!
maxi


   
   

[snowcat]

Rumours that they may use NMGC chips in AAPL phones.  up 25%

http://finance.yahoo.com/q?s=NMGC