I was going to write an entry about how it didn’t look like Magma (NASDAQ: LAVA) was going to survive, what with losing cash, a lot of debt due, and not much in the bank. Employees don’t like it when you don’t make payroll. I heard that private equity people were looking at Magma but were not really interested. It wouldn’t have cost much to buy Magma but it wouldn’t be quick to fix so it would take a fair bit of investment before it was dressed up ready for a new party.
The latest rumor is that it is indeed going private but that Rajeev himself, the CEO, along with Andy Bechtolsheim, one of the original investors, are going to buy it off the public. They already own 10% or so each, and much of that Magma debt has been trading at 30 cents on the dollar making it cheap to get rid of. If this happens the hard work then begins. Rebuilding the technology base takes time but Magma still has some outstanding engineers and they did it all before in the face of a lot of skepticism when they first started, but don’t forget it took nearly $100M in venture capital to get there.