Magma Design Automation, Inc. provides design and implementation software that enables chip designers to reduce the time it takes to design and produce complex integrated circuits used in the communications, computing, consumer electronics, networking and semiconductor industries. Magma Design Automation Inc. has a market cap of $122.5 million; its shares were traded at around $2.49 with and P/S ratio of 0.8.
Highlight of Business Operations:Total net gain on the put option and the ARS of $0.2 million and $0.3 million was reported in valuation gain (loss) in the condensed consolidated statement of operations for the three and six months ended November 1, 2009, respectively.
Based on the Level 3 valuation and the transfer of the ARS from the available-for-sale category to the trading category, we recorded an unrealized gain of $0.4 million and an unrealized loss of $1.9 million for the quarter ended November 1, 2009 and November 2, 2008, respectively, including the transfer of accumulated temporary losses of $0 million and $0.9 million, respectively, from other comprehensive loss previously recorded as a component of stockholders equity. For the quarter ended November 1, 2009, total other-than-temporary impairment gain on ARS of $0.4 million was reported in the valuation gain (loss), net in the consolidated statement of operations. This gain was offset by losses related to the purchased put option of $0.2 million. For the six months ended November 1, 2009, we recorded an ARS gain of $1.2 million offset by losses related to the purchased put option of $0.8 million.
equity preferences held by us or others. If an investee obtains additional funding at a valuation lower than our carrying amount, we presume that the investment is other than temporarily impaired, unless specific facts and circumstances indicate otherwise, such as when we hold contractual rights that give us a preference over the rights of other investors. As the equity markets have experienced volatility over the past few years, we have experienced substantial impairments in our portfolio of non-marketable equity securities. If certain equity market conditions do not improve, as companies within our portfolio attempt to raise additional funds, the funds may not be available to them, or they may receive lower valuations, with more onerous investment terms than in previous financings, and the investments will likely become impaired. However, we are not able to determine at the present time which specific investments are likely to be impaired in the future, or the extent or timing of individual impairments. We recorded impairment charges related to these non-marketable equity investments of $0.1 million and $0.2 million, respectively, for the three and six months ended November 1, 2009. Similarly, we recorded impairment charges related to non-marketable equity investments of $0.1 million and $0.3 million, respectively, for the three and six months ended November 2, 2008.
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