It feels a lot like biotech. Lots of promise. No track record. Nonetheless, any day now, General Magic Inc., a Silicon Valley software maker with zero profits, a whisper ef revenues, and very big dreams, plans an initial public offering that has Wall Street buzzing. The early line: This IPO could rise well above its expected $13-a-share offering price.

Why? The 1990 Apple Computer Inc. spin-off is one wellborn toddler. Two of its three founders, Andrew Hertzfeld and William Atkinson, helped create the Macintosh. The third, Marc Porat, is a Silicon Valley visionary who championed anytime, anywhere communications at Apple. General Magic's investors--who already have ponied up $77 million--read like a high-tech Who's Who: AT&T, Sony, Motorola, Matsushita, and Toshiba, to name a few. And the company operates in a white-hot field: software for wireless communications. Says Motorola Vice-President Randy Battat: "This is a long-term, huge opportunity."

But it may be a long time before the opportunity pays off. A $13 stock would give General Magic a market value of some $300 million. Yet it has revenues of just $2.5 million--from two products largely unproven in the market. Its Magic Cap software for "personal communicators" lets people send and receive E-mail and faxes by tapping on the screen of a handheld device. Then, there's Telescript: a programming language for communications software that enables software "agents" to zip along I-ways to retrieve data.

TOO EARLY? General Magic hopes to be the standards-setter in personal communicators--a sort of Microsoft Corp. of the handheld market. Trouble is, Microsoft plans to be that, too, as do Apple and software maker Geoworks. Meanwhile, the market for personal communicators has yet to jell. Says Nathan P. Myhrvold, senior vice-president of Microsoft's Advanced Technology Group: "General Magic is going to miss the window. Their effort is way too early. I can't imagine how they will be successful."

General Magic's answer is to develop versions of Magic Cap that run on personal computers. That way, handheld devices using Magic Cap will be able to swap info with PCs. The new Magic Cap versions are set to debut this summer. For marketing muscle, the company is counting on its big partners to license its software for their own products. So far, though, only a handful have stepped up to the plate.

Meanwhile, analysts figure General Magic is spending $2.5 million

a month. Red ink to date: $53.1 million. And its prospectus says it expects "substantial" losses through '96. The 4 million share IPO will sell less than 20% of the company, raising some $50 million. Insiders expect that, plus $34 million in cash on hand, to carry General Magic into '97. Could be. But investors may have jittery moments before its fundamentals match the hype around it.

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