Why Magic Software (MGIC) Is Falling Today

NEW YORK (TheStreet) -- Magic Software (MGIC) was falling 10.2% to $8.52 Friday after the software company announced the price of its 6 million share public offering.

Magic Software, which makes business development solutions, announced that it will price the underwritten offering of 6 million ordinary shares at $8.50 a share. Formula Systems (1985) (FORTY), the company's largest shareholder, agreed to buy 700,000 ordinary shares at the public offering price. That purchase will give the company a 45.9% stake in Magic Software.

The company plans to use the new proceeds from the public offering for general corporate purposes such as funding of its working capital needs and funding potential acquisitions.

Barclays Capital Inc. and William Blair & Company, L.L.C. are acting as joint book-running managers for the offering, while Maxim Group and H.C. Wainwright & Co. are acting as co-managers for the offering.

Must read: Jim Cramer's 'Mad Money' Recap: A Matter of Distrust

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings team rates MAGIC SOFTWARE ENTERPRISES as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MAGIC SOFTWARE ENTERPRISES (MGIC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

If you liked this article you might like

Jim Cramer's 'Mad Money' Recap: A Matter of Distrust

Thinking Small

Thinking Small

MGIC: Financial Winner

Mortgage Insurers Bashed After MGIC Miss

Mortgage Insurers Bashed After MGIC Miss