General Magic gets $5 million more

Two days after receiving a $6 million investment from Microsoft (MSFT), General Magic (GMGC) said today that it has completed a private financing transaction that will raise another $5 million.

The company said that proceeds from the deal will be used to fund the growth of its network service that is planned for launch at midyear, dubbed "Serengeti."

"General Magic is on track to meet a mid-1998 milestone for delivering Serengeti to market," chief executive Steve Markman said in a statement. "This funding will certainly assist us in achieving our goal."

The financing includes the sale of $5 million of convertible preferred stock, which can be converted into common stock at below market price. The company also issued 5-year warrants to buy additional common stock, and has the option to secure an additional $5 million on similar terms.

General Magic stock fell 1/8 today, closing at 4-15/16.

Microsoft's investment in General Magic on Wednesday provided a needed boost to the company. It has been undergoing a reorganization after generating consistently disappointing earnings and stock-price performance. Markman, former executive vice president for Novell, was named CEO in September 1996, and has been trying to turn around the company.