The New SGI, One Month Later

by Jon C. Ogg
November 21, 2006

If you have been around the markets and technology for a while, you probably remember SGI (SGIC-NASDAQ).  This company has been around the block.  It used to be THE graphics and gaming platform, but the rest of the world caught up and various mismanagement steps took the company down the endless road to bankruptcy and beyond.

About 1 month ago SGI re-emerged from bankruptcy, its bond holders and creditors got new stock, the old shareholders were wiped oout, it left the OTC Pink Sheets, and it got a new ticker of "SGIC" on NASDAQ.

Its balance sheet still has a lot of room for improvements.  The total assets are listed as $518.1 million with liabilities at $332.2 million, but $175.4 million of the assets are deemed goodwill, intangibles, and "other." 

The new SGIC stock opened at $20.00 on October 23, 2006 and it hasn’t seen that price since.  It does not necessarily mean the bottom is falling out, as it is quite frequent for the old creditors to begin a mass migration of selling shares to recoup losses and to get out of what has been an eye sore on the books.  Yesterday shares put in a new low for a close of $18.25 and close yet lower today at $17.62.

It is obvious that either investors haven’t gotten the message, or the message they got wasn’t that good.  The stock volume has also been sparce, so there is still a long ways to go before the company gets back into favor.