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Updates On The Caldera IPO
kerskine writes,"It seems that there's strong demand for Caldera's upcoming IPO CNET reported that they've raised their strike price to $10-$12. This news is in sharp contrast to more negative appraisals such as this article from Forbes.com." I only know of a small number of Linux Developers who got "The Letter" from Caldera on their IPO. Gotta wonder about that.
Best I can tell, there are two major reasons behind Caldera's move(beyond "they're afraid that NASDAQ is puking right now"):
1) Reverse psychology. Stocks have their prices raised in response to heavy demand. An interesting way to turn the tide on low investor demand is to *act* like there's high investor demand. Some portion of investors would believe that a company being convinced that their stock is going to be heavily demanded means their stock actually *is* going to be heavily demanded. And, gee, if investors think that a stock *is* demanded, suddenly it *is*.
2) Cash distribution, particularly if the market isn't thought to be amenable to second offerings. Caldera may not want to sell any more of its soul to venture capitalists. In order to do that, it has to make as much money--as a company--selling its shares to the market. Now, you do multiple releases when you think that your stock sale at time B is going to net more cash than a stock sale at time A. If you don't think the market will keep your stock so highly valued, or if you think you'll never "escape the gravity" of your present market position without an extensive war chest with which to market and develop with, you sell your shares off on the market once at as high a price as you can muster. Raising your IPO price, so you don't have to directly sell any more of the company to the venture capitalists, gives your company a much larger war chest, is moderately neutral to existing owners(although the lack of an initial runup to the higher price may harm momentum; see PALM), and is most painful to those lucky enough to have the right to purchase stock at the IPO price(since the delta from IPO to sale price is necessarily shrunken).
At least that's how I see it.
Yours Truly,
Dan Kaminsky
DoxPara Research
http://www.doxpara.com
Linux IPOs are destined to slow down for a variety of reasons. The most important of which is branding. Since the source is available and everyone can make a distro the only thing that counts (to the market) is brand recognition. That's why RedHat and VA Linux made all those deals and attached themselves to many websites so as to get brand recognition. After all to random investor X, who is Debian? But such people know Redhat and a lot of people actually believe that they own Linux or at least that Linus works for them or owns the company. Even supposed techies on ZDNet's talkbacks make comments like that just make my jaw drop in awe.
Anyway back to Caldera, it has no branding outside of the linux crowd except for being the company that sued MSFT and then settled for chump change. As Forbes eloquently put it
Although its tie-in to the free Linux operating system will secure a strong opening, Caldera's lack of fresh perspective and obscure branding leave little to inspire any ongoing enthusiasm.
In addition to striving after a dubious market, Caldera has failed to differentiate itself from the competition. The company has dabbled in both Linux software and hardware but has failed to make itself a market leader in any one area, says Dan Kusnetzky of IDC.
which is completely true and finally
This, says Yates, is the company's only chance if it hopes to define itself in an increasingly crowded marketplace. But Caldera will need to act fast, given that stock prices of Linux companies tend to come spiraling back to earth a few months after the IPO. Both VA Linux and Cobalt, for example, have lost more than half their value since their stellar debuts.
The way I see it besides SuSE and maybe Penguin Computing I can't see any Linux company IPO being as hot as VA Linux or Redhat's due to the lack of branding and distinguishment from the competition. Then again the Dow rose 499 points yesterday against all expectations when everyone and their mother said we were beginning to experience a long overdue correction, so who knows?
The Forbes article makes what seems to be a very reasonable criticism of Caldera, which is that it is an uninspiring company with a bland public imgae, that does little of worth to set it apart from its competitors.
This point of view presumably is not in any way in keeping with the feeling of most investors however, who seem to be keeping the company's shares in high demand.
It seems to me therefore that this company is being buoyed up solely by the fact that it does 'something with linux'. Given its lack of branding and strong competitors like RedHat and VA, I am assuming that investors don't care what exactly it does with linux, and that the mere mention of the OS that has become the daytrader's best friend is enough to drive share prices to inexplicable and unsustainable levels
The market for tech stocks is getting ridiculous at the moment, and what better example could there be than this; an uninspiring company, in an already crowded field, with an uncertain future business model, and people can't get enough.
Caldera will be remembered as an also ran. A company whose sole claim to fame (apart from 'doing linux') is that they failed to win a court case against the evil empire and settlesd for about $42 dollars and a field full of goats. Long live market stupidity!
gypsumfantastic
+++ The meaning of a statement is the method of its resolution
ø`ø,,ø`ø,,ø`ø,,ø`ø,,ø`ø,,ø`ø,ø`ø
According to this advogato article, mostly kernel hackers (including Alan Cox) got offers. Seems some apache folks ago got it.
--
see shy jo
From lwn:
We have just received information that Caldera indeed has made their directed shares program available to international developers, particularly in Europe but including other areas of the globe. In order to do so, they are working with multiple investment firms. Wit Capital is handling only domestic US accounts, which is correct, but Bank of America Security, LLC is handling International accounts. Bank of America can be contacted at 415 627 3115, 600 Montgomery Street, San Francisco, CA. Account forms are due to them via FAX (415 913 5530) no later than Friday, March 10th, so move quickly if you have this opportunity. We have confirmed participation in Australia as well.
This is just a bunch of biased personal opinions, expecially the Forbes article.
They (and you) claim that Caldera has not contributed anything to the community. This is not true: they contributed and continue to do so, a lot of neat networking stuff in IP and IPX protocols. Also, they made NetWare for Linux (which is not like mars, but has a fully functional NDS v 4.x), an NDS client for Linux, ported Netscape FastTrack server to Linux, made Lizard and COAS available opensource...
I think these are important things. Caldera has contributed to the Linux community quite a lot, actually.
Sigged!
Why do you 'wonder' about that? I thought that originally getting into Linux wasn't about cashing in at some later date, but rather producing something for free. Redhat opened a real can of worms with it's little 'letter' campaign, and it really brought out the greed in people (the common mantra being "I work on package X...why didn't I get a 'letter'?").
Since you didn't get 'the letter', what then? No one is obligated to get free stock...since when did the free software movement turn to greed?