After share price triples, Magic looks to Nasdaq funds
going to dilute the shares & earnings & raise pe. party is over
News After share price triples, Magic looks to Nasdaq funds The company is considering raising $30-40 million. 9 December 10 17:02, Shiri Habib-Valdhorn Sources inform ''Globes'' that Magic Software Enterprises Ltd. (Nasdaq: MGIC; TASE: MGIC) wants to exploit the rally in its share price, which has risen 185% since mid-September, to raise $30-40 million on Nasdaq. The rally has boosted Magic's market cap to over $203 million.
Magic was one of the first Israeli companies to dual-list on Nasdaq in 1991.
Magic had $26 million in cash and investments at the end of September, and it has a positive cash flow. In other words, the company does not need to raise capital; it is merely exploiting an available opportunity. That said, the company has drawn the attention of banks and potential investors wanting to participate in an offering. if Magic goes ahead with an offering, it will hold it after publishing its financial report for 2010, i.e. in March or April 2011, assuming there is no dramatic change in the share price.
Magic's share price fell 1.7% on the TASE today to NIS 23.15, but is up 11% in premarket trading on Nasdaq to $7.02.