Slashdot Mirror
Class Action Lawsuit Against VA
Yahoo has a story up now about
a class action Lawsuit against VA, which is my employer, and owns Slashdot, so
of course I'm biased blah blah. Of course, I have no clue about any of
the stuff in the article because it's about stock allocation by
Credit Suisse during the IPO, and that sort of stuff is way outside
the realm of things I have any understanding of. Update: 01/11 09:58 PM by H : The Milberg people have a website with more info and PDFs about it -- and I just tried VA, who have "categorically no comment."
Every time I see stories about VA, I always read them as something like "Class Action Lawsuit Against Virginia". I bet you're glad that slashdot is not owned by the Commonwealth of Virginia, so act like it!
Look at it this way: Would you want to be a corporate director if you knew that you personally could be bankrupted by any two-bit shyster looking to make a fast buck off the slightest misstep the company makes, or even events in the market that have nothing whatsoever to do with the company's performance? 211 would basically have taped a giant "kick me" sign to the back of every corporate director in California, which would include a large portion of the Silicon Valley VCs...and for no other purpose than lining the pockets of Lerach and his ilk.
If lawyers didn't already have a bad name, Lerach could single-handedly give them all one.
Eric
--
Be who you are...and be it in style!
If an ethical law firm were involved, that would be a different story.
sulli
RTFJ.
There are a slew of lawyers that make a great deal of money friviously suing claiming securities violations.
Many of the companies I own stock in are being sued likewise (Corel, Plug Power, and Citrix).
Although these suits are without merit, they hurt the companies stock prices dramtically: look at each of the above company's history, and see the biggest dip the day after the suit starts (none have recovered).
Often, these suits end if the company can pay the lawyers enough money to "end the suit without predjudice", meaning, the shareholders can continue the suit (if they want), but the lawyers got their money and will run.
There was an article in Forbes a few months back detailing one lawyer who does busines this way (worth over $10B).
The companies and the shareholders (including the plaintifs) will all loose a great deal of money over these suits. The only winners (ever) are the lawyers.
That's why they do it.
When I die, please cast my ashes upon Bill Gates -- for once, make him clean up after me!
I went to check, here it is so you don't have to...
VA Linux Systems
today's high 9.50________previous close 8.09
today's low 7.87_________bid 8.50
today's open 8.00________ask 9.00
volume 2,034,900________earnings per share -1.92
52-week high 207.75_____dividend per share Not Avail.
52-week low 6.62_________dividend pay date Not Avail.
P/E ratio Not Avail._____ex-dividend date Not Avail
This Cisco exec should then be sued by the shareholders of Cisco for not making a business decision with solely the interests of Cisco the company and its shareholder value in mind. If someone is employed/appointed to the board of a company it is their responsibility to act solely in their interests with respect to his/her authority in the company.
I wouldn't blame the IPO company for offering the bribe.
Mmmm.. Donuts
Are you a complete idiot?
If this was a story about Microsoft fixing licensing fees you would be screaming bloody murder.
This suit is about Credit Suisse, a large investment bank, making illegal backend deals to sell stock which was supposed to be offered PUBLICLY to large customers at preferred prices.
The fact that some idiots moderated you up to 5 is even more frightening. Just because a company sells Linux-based software doesn't make it as clean as the wind-driven snow!
I think it is time for trolls like you to just go away and crawl back under the rock that you came from.
Conformity is the jailer of freedom and enemy of growth. -JFK
Um, no. Thanks to the Prop 211 fiasco, I had contempt for Lerach and his cohorts years before I had even heard of VA Linux, and while I was still working as a Windows programmer.
Yes, if someone profited illicitly from the VA Linux IPO, those people should be held accountable for their actions. But the mere fact that Lerach, and/or his firm, are involved with this lawsuit, viewed in light of their prior track record, strongly suggests that their motives are, shall we say, not entirely in line with those of their "clients." (Look it up for yourself; I dug up those three links I posted in my previous posting in about two minutes by searching on Google for "Bill Lerach." There's more where those came from. A lot of people hate this guy's guts, including people that could give a rat's ass about Linux.)
Eric
--
Be who you are...and be it in style!
...may or may not be guilty of unfairly supporting the trial lawyers. But one thing we do know is that the following statement is false:
However, President Clinton has pushed hard against every kind of tort reform effort.
The real problem with tort reform is similar to the problem with campaign-finance reform. Everybody knows something should be done, but the only people making proposals are those with a strong interest in an unfair system: Republicans and Democrats in the case of campaign-finance reform; insurance companies and lawyers in the case of tort reform.
The impasse has been broken on campaign-finance reform by an alliance between a Republican and a Democrat (McCain-Feingold) which addresses the problem without biasing the solution one way or the other. What we need is a similar kind of alliance or an independent group attacking the problem in the area of tort reform.
What it comes down to is this. The insurance companies define tort reform as: "You can't sue our clients. And, if you do, you can only ask for a small amount of money." And the lawyers define it as Prop 219 (or whatever it was that was defeated out in California).
Politicians (like Clinton) don't mind this because they can point out to voters the problems with whatever "solution" they are forced to take a position on and say they would support a reasonable solution. Since no reasonable middle-ground solution has been passed, we cannot know if this is true or not. "Support of reasonable reform" is what Clinton has said is his position (not "I will push hard against every kind of tort reform"). We don't know if he really means this because he has never been forced to take a position on real reform.
The weird thing about this one is that everybody knows what the real solution is (most countries have a version of it): Distinguish clearly in law between lawsuits which are not successful but are not frivolous and lawsuits which are totally without merit and frivolous; and then institute severe penalties for the latter without restricting the former.
This is not necessarily an easy distinction to make. But it is a distinction which already exists in U.S. law (it merely needs a clearer definition and stronger sanctions against the frivolous side of the distinction). And it has proven worthwhile everywhere it has been tried. Everywhere the insurance industry's version of "reform" has been tried it has hurt many people who were not abusers of the system.
BTW, be careful about repeating insurance-industry propaganda (like "Clinton is against all reform"). Early in my career as a journalist, I was taken in by an industry press release which had some great anecdotes about lawsuits, which I used in a story on the subject. I later learned that nearly every one of those stories contained deliberate lies about the actual facts. It is very easy to become a pawn of these people who are very effective at pushing hard for their own interests by convincing you they are working for your interests.
None of this should be taken in any way as supporting the lawsuit against VA Linux. It is a false dichotomy which the insurance industry likes to promote that you cannot oppose these frivolous lawsuits without destroying any right of individuals to seek redress in the courts.
Eternal vigilance only works if you look in every direction.
for those wondering what this is about, this story never made slashdot the other day even though it was submitted by many people. check it out, then decide for yourself. Zdnet story
11. VA Linux stock loses 95% of its value
I love the omission... how about 10.A. market nose dives.
In any case, after the crazy way the nasdac has been behaving it should be blatently obvious that stock prices have no basis in reality. For an extended period of time it has been simply an excercise in mob mentality. Everybody's been hit large and small. So you're going to grow by 4%, not 5%, this year. We'll all get out here's a 20% cut in your stock price? VA can't control its shareholders overreaction to its statements, or the general market skitishnes.
This has everything to do with dumb investors and nothing to do with companies. You shouldn't get into the market unless you do the research... and even then, these days the research sometimes isn't worth a damn.
--locust
1. CmdrTaco admitting he is bies..
2. A link to an oposing view with out first in some way slamming same...
3. Anything showing a weakness in any Linux or Slashdot affiliated companys..
No thies things will never be seen on Slashdot... Never... ever.. umm what?
I don't actually exist.
OK, so I read the complaint. Here's my understanding of it (which surely some people will later refine/correct)
1.) the prospectus for LNUX claimed that Credit Suisse would get 'n' shares
2.) Credit Suisse actually procured 'n+x' shares.
3.) Credit Suisse then made backroom deals with big Credit Suisse customers to sell them the stock at "better than market, but still not IPO price", in exchange for increased commissions.
4.) This "forced inflation" of the price, caused others to have to pay higher-than-fair value for the stock.
The plaintiffs appear to contend that the offering was illegal because (a) they lied on their prospectus (points 1 and 2 above), and (b) people paid artificially increased prices for the shares (points 3 and 4 above).
Basically. That's certainly not definitive legalese, but its how this untrained guy (who happens to enjoy reading/understanding court documents) would read it.
D
5. VA uses Slashdot to bolster that perception by the public
8. Slashdot founders get millions.
Except that VA bought Andover (Slashdot's parent company) _after_ the ipo.
also it's worthwhile to point out that none of what you said had anything to do with the lawsuit except:
12. The shareholders get pissed off
If you want the real reason for the lawsuit read the article.
None of this was probably known or imagined by VA. I suspect that if the "net stocks" had not crashed and burned, nobody would care. As it is, there is a lively "cottage industry" of lawyers such as the ones filing the case who will invent a class and file an action on pretty much anything after a stock's price has fallen. At the minimum, they expect to extort their legal fees from the company that they are filing against. The members of the class that they represent (please read invent) will get little or nothing. If they take all the time to file the papers necessary to claim their award, they will not make minimum wage. In the meantime, the law firm compensates itself with the majority of the moneies awarded.
<rant>
This practice by legal firms such as this represents perhaps the lowest in the legal profession. While they will tell you with a straight face that they are "representing the little guy", they are in truth only representing themselves.
disclosure: I own no VA stock
</rant>
no it's not resonable. You should choose a term that relatively clearly & uniquely refers to the company in question the term Linux clearly & uniquely refers to something else...
If you had to choose short hand for "VA Linux", would you use:
a) Linux = 5 letters
b) VA = 2 letters
c) I'm illiterate.
"I can't buy want I want because it's free. Can't be what they want because I'm me." -Corduroy, Pearl Jam
Wait a minute! I was looking forward to watching a lawyer cross-examine a stack of CDs. Or, perhaps someone will slap together a box using Festival to pipe an Eliza program quoting from fortune-mod to respond to questions:
"Mr. Linux, what can you tell me of the conversation that took place in the VA Linux Systems boardroom on August 28, 1999 at 1500?"
"Clothes make the man. Naked people have little or no influence on society. --Mark Twain"
"Mr. Linux, may I remind you that this is a court of law?"
"Old musicians never die, they just decompose."
"And just what do you mean by that remark?"
"Q: What do you call a blind, deaf-mute, quadraplegic Virginian? A: Trustworthy."
And so forth, into the night...
--
--
"Outlook not so good." That magic 8-ball knows everything! I'll ask about Exchange Server next.
A more likely scenario, from another perspective:
1. VA Linux notices hot market for IPO's
2. VA sees lots of others making huge money from stock offerings
3. VA promotes Linux as 'next big thing'
4. VA associates itself with being the bringer of Linux
5. VA uses Slashdot to bolster that perception by the public
6. VA misleads people into thinking that they actually can provide real value, and be a profitable company.
7. Unwitting investors believe this, and buy the stock.
8. Slashdot founders get millions.
9. VA insiders cash out their options, reaping millions of their own (along with the VC's)
(The CEO, Larry Augustin, made off with $10 Million of stockholder money)
10. VA Linux stock crashes, as they have no possible way of justifying the market cap.
11. VA Linux stock loses 95% of its value
12. The shareholders get pissed off
13. Lawyers find a way for some people to recoup their losses
14. The people who lost money eagerly go after VA.
Folks, do you have ANY idea how much money the VA insiders walked away with? Do you have any idea on WHOSE money that really was? Do you really think that the VA insiders actually earned it, or did they con the public into thinking there was real value?
If you con someone, is it the fault of the con-man, or the fault of the 'idiot', as you say?
This story is repeated every day with different companies. This may be flaimbait, but I think it is about time that company founders start accepting the consequences of misleading a gullible public.
[For the record, I never bought or sold a single share of stock in my life. I just watch with disgust, usually, at the behaviour of these hype-stock companies]
Bastards! How dare they sue anyone or anything affiliated, much less owning, Slashdot!!!
When you are suing someone you usually want to be specific about what you are suing them for. Any good lawyer knows that. You research, study and get all the dirt on something before you sue.
They haven't done their homework and thats why people are pissed that they are associating totally two different things (company/kernel). This shouldn't be done; however I don't think we'll hear much from Linus Torvalds on the topic. Worst comes to worst the matter will be cleared up in court. Whether it be with a counter suit from Linux claiming that the software/kernel are too different things and that as a result an estimated "number here" was loss.
That's what happens when you are greedy and don't know what you are talking about.
Looks like there were some shady dealings going on with the IPO. No matter how much I like VA Linux, there's no excuse for this, and no company should be allowed to get away with it. Here's hoping they learn a hard lesson.
--
I don't get what's wrong with you people! This is a workaday lawsuit, commonplace even. Both points of view obviosly have legitimate points-of-view, or the Judge would not hear the case~! Look at it this way: if it came to light that the VALinux people were screwing around with the numbers maliciously, the SEC would step in... But if the VALinux mba's and ca's were simply incompetent, attorneys like Lerach are your only recourse.
You people are clearly letting your emotions about 'linux' guide your contempt for lerach & his cohorts... It looks like the IPO was handled ineptly, and even if there is the slightest chance that gross, incotrovertable negligence is to blame for that, you need to have the situation examined and arbitrated. that is what Tort is all about. And if it turns up that the good ol boys at valinux did make mistakes, somebody somewhere has to pay the piper. WHO BETTER than the dorks that screwed this particular pooch of an IPO? who better to pay up than the party that profitted from the IPO? What? You have NO answer to that? So very fscking good of you to consider the situation before spouting off!!!
Letting your 'feelings' for Linux and/or this particular corporation guide your opinion of this lawsuit is not rational- BY DEFINITION. Do any of you 3117 455 industry analysts and armchair attorneys consider yourselves irrational? NO! You all pride yourselves on your rationality. So wtf are you guys spouting about?
At no point are any of the plaintiffs here being dishonest or malicious. They are fully justified in their minds, and aren't afraid to say it. I'll leave you with this quote from Lerach to chew on. and next time, have some fscking perspective before spewing such uninformed cynicism!
"Like the anti-trust bureaucrats who attack free enterprise in the name of free markets, Lerach defends his aggressive filing of lawsuits as necessary to police private markets. Says Lerach, "Private enforcement of the law, guided by the profit motive, overseen by an independent federal judiciary, working within laws we have all agreed upon through our elected representative, [has a] useful role to play," in keeping markets strong and fair."
Solidus Fullstop, Esq.
Solidus Fullstop, Esq.
"hey, you stole that sig from me!"
Couldn't someone file a sute clamming this is filed in defience of the wishes of the "class" in this class action lawsite?
Could investors legally side with VA and join VAs site of the legal battle?
Could investors who disagree with this lawsute something to terminate, oppose or in some way registure the fact that this lawsite is not in prepresentation of there own intrests?
It would be my guess that something could and should be done by VA supporting investors to oppose this...
Ideally Linux IPO investors are Linux advocates and many would not want such a lawsute on the behalf of themselfs...
I don't actually exist.
So this use of the name maybe make sense when you think about it, but for a law firm it's extremely careless and almost certainly actionable. And given that we know Linus does act against improper uses of his trademark, I see in my crystal ball another large chunk of the Linus Torvalds Personal Pension Fund coming on a check with 'Milberg' on the top...
It couldn't happen to a more deserving cause!
I'm old enough to remember when discussions on Slashdot were well informed.
There are a slew of lawyers that make a great deal of money friviously suing claiming securities ...
violations.
Although these suits are without merit, they hurt the companies stock prices dramtically: look at each of the above company's history, and see the biggest dip the day after the suit starts (none have recovered).
I wonder if it's securities fraud (trading on inside information) to:
- Buy a big bunch of "put" options or short a bunch of the company's stock, then...
- Bring such a suit.
I think it would be useful for companies being so sued to check whether any of the parties to the suit are palying that game, too. (If so you could get them in a HEAP of trouble - and find grounds for a counter-suit, too.)
Heck: If the FTC made a point of investigating the recent trades of anyone bringing such a suit, looking for such shenanigans, I bet it would put a real damper on them.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Umm... okay
I'm not against lawsuits -- they actually are one of the best methods by which corporations can be kept in line, instead of massive governmental control.
Plus, that 30% settlement money doesn't just sit around in a pile, the lawyers pay employees, buy yachts, buy computers, pay nerds to run the computers systems, etc. It's a form of wealth redistribution.
I just find it pathetic that a law firm thinks so little of itself (or has such a limited imagination) that it does things like this...
Potato chips are a by-yourself food.
This Cisco exec should then be sued by the shareholders of Cisco for not making a business decision with solely the interests of Cisco the company and its shareholder value in mind. If someone is employed/appointed to the board of a company it is their responsibility to act solely in their interests with respect to his/her authority in the company.
I feel the same way but the truth is that dotcomm boards have been getting away with things that would seem unethical in traditional companies for quite a while. Here's an article on Fortune about some more weird dealings by the board of a dotcomm, most of these seem like fraud or at least seem unethical but so far not that many people seem to be getting punished.
Here's an expose on the shadiest dealing of the New Economy entitled MISADVENTURES IN THE ME-FIRST ECONOMY: Four tales from the ethical gray zone of the Internet economy from Fortune.
Grabel's Law
Obviously there's a whole lot more to this story. I don't dispute its potential news-worthiness and appropriateness for posting here. But the creation of news that is so uncritically "reported" by simply issuing a press release seems somehow opportunistic and irresponsible.
Oh yeah, we're talking about lawyers and news online. Never mind.
-schussat
The hour of noon has passed. Let us go and get some Kentucky Fried Chicken.
- Idiot reads news article that Linux is the next up and coming thing, doesn't really know what linux is...
- VA Linux offers for IPO,
- Idiot makes association between Linux and VA Linux, dreams of getting in early and retiring early begin,
- Life savings are withdrawn from bank and invested saying "How could it fail with LNUX as the stock symbol?"
- VA Linux initially does well, dreams of retiring early are replaced with dreams of owning small nations,
- VA Linux suffers the same fate of many dot coms last year and takes a downturn,
- Idiot's dreams explode and idiots wife starts bitching about loosing their life savings,
- Idiot does the typical thing by not blaming himself for gambling everything on something he knew nothing about, begins looking for scapegoats...
- Idiot meets other idiots and forms a class action lawsuit,
- Lawyers dive in like vultures since they are the only ones who will make any serious money
This story is repeated every day with different companies. This may be flamebait, but I think it is about time that people started accepting the consequences of the risks they take.File this under To Be Ignored
Potato chips are a by-yourself food.
It looks like a few select investors and fund managers were hot to get in on the IPO. Not just anyone can buy IPO shares at the initial price, because those shares are restricted. So the investors paid off Credit Suisse, who were in charge of the IPO, by giving Credit Suisse extra commissions... a deal that Credit Suisse negotiated.
In some cases, the investor's commissions were determined by how much the IPO stock rose, aand therefore how much money the investors made on day one. (Note: and you thought BOXING was fixed...)
Even though CS did the dirty work, this involves VA Linux because it's VA Linux who writes the conditions of the IPO deal. And if not as many shares were available as VA Linux said there would be, they "lied" -- and the rest of the shareholders have gotten a raw deal. And due to supply and demand, if not as many shares were available as VA Linux said there would be -- that would have the effect of driving up the share price even higher at its opening.
I think there are two places where your view sharply diverge from reality:
There is no such thing as an "unwitting investor." People who give give money to endeavors they make no effort to understand, in the hopes of making large profits, are not called "investors." They are called gamblers, or speculators. Con men call them "dupes." No-one calls them "investors." These lawyers have no interest in helping anyone recoup their losses. They are not going to help anyone recoup their losses. I do not share the same general animosity and lawyers and the legal system held by many other people on slashdot; but it is painfully clear that in this case, dirty little parasites hope to use the broken parts of the US legal system to suck as much blood as they can out of VA Linux, with no intention of passing any significant amount back to the investors. Frankly, it's often the fault of the person getting conned. In general, con men don't con stupid or gullible people. They con greedy people. If you check out most of the successful cons jobs out there, they usually involve greedy dupes who were led to believe they were somehow taking advantage of the con man. It's true that the Internet IPO market started to look kind of ugly in the last few years, but it was never the case of greedy, evil companies taking poor, unsuspecting dupes to the cleaners. The reality is quite a bit more complicated. It usually is.Slashdot is jumping the shark. I'm just driving the boat.
- 1. There was something like a 'friends and family' program with the VA Linux IPO, where certain people got shares of VA Linux at the IPO price (this is common in IPOs).
- 2. VA Linux's underwriter, Credit Suisse ('CS') had a 30-day option to sell even more shares of VA Linux at the IPO price, up to 15% of the number of shares in the original IPO (this is also common in IPOs; the underwriter generally exercises the option and sells the shares if the IPO is a hot one).
- 3. The complaint basically says that these 'friends and family' shares and option shares were sold by CS to certain people in ways that gave CS extra benefits, hurting investors who could not buy these shares at the IPO price from CS.
- 4. This has been a sore topic for the SEC lately, where certain people get shares at the IPO price, and then can turn around and tell them immediately after the IPO, turning a very large profit, quickly.
- 5. It really has nothing to do with VA Linux itself, other than the mechanics of VA Linux's IPO.
This begs the question of why Credit Suisse isn't under investigation by the Securities and Exchange Commission and on the receiving end of this lawsuit as well, but I've heard nothing of the sort (so far)...--
Nobody would want to pass up that deal, and really I don't see how it is illegal. The additional shares you purchased were owned (it seems) by VA. Unless they've made a law against it, you can sell your property for whatever price you want. VA could have sold those shares for $.02 each if they wanted. As for people who are bitter about not being on the friends list, tough luck. It seems you were added to the list because you DID something to get there, and you deserved it. Good for you.
--John
(Just Was There And Did That)
.com fashion it fizzled on the market after a year or
I worked (technically still work, but the company recently shuttered it's doors) for a now-maligned
.com. We had a decent IPO, but in typical
so.
After the stock took it's initial nosedive, the lawyers crawled out of the woodwork, attempting to
scare up enough PO'd investors to raise a class action suit. A bit of research into the first
bottomfeeder to raise it's head showed me that the only reason for this (the attack weasels) firm's
existence was classaction suits, mostly against companies who's stock performance was less than
profitable.
This is NOT a good situation to be in. Even tho nothing had been officially served at the time,
the very smell of litigation scared off those who might have assisted us, and tied our hands in
other matters. IMHO, we could have worked our way out of the slump and gone somewhere. Instead
we're boxing it all up for the liquidators and turning off the lights.
We wern't the first to fall prey, and we certainly won't be the last. The bitch of it is, it's not
like these class action suits provide any relief to the 'victims' - they'll by lucky to see a few
cents (or fraction of a cent) on the dollar returned to them, while the attack weasels line
their pockets and buy another vacation home.
/* The purpose of this program is to underwrite VA Linux's IPO (front some money).
/* money in cents */
/* Money from IPO */
/* Number of Shares Left */
/* From standard_Bank_Procedure.h
/* From pretty_underhanded.h */
VA and Credit Suisse agree to not tell the SEC what they are doing. Credit Suisse
also agrees to help the IPO look really good by getting "major investors" to buy
big at ** inflated prices ** after the IPO. This will return inflated profits and
will inevitable result in frenzied Post-IPO buying. */
#include <standard_Bank_Procedure.h>
#include <pretty_underhanded.h>
int main(){
char VA_Linux = "Linux" ;
unsigned long int Make_Client_Overpay_After_IPO = 999999999999;
unsigned long int A_Shit_Load_Of_Money_To_VA_And_Credit_Suisse = ;
unsigned long int shares_left = 4500000;
/* Legal */
agreeToUnderwriteShares(VA_Linux);
do{
/* Illegal */
sell_Extra_Shares_Really_Cheap(excessive_fees);
sell_Shares_Cheap(Make_Client_Overpay_After_IPO);
sell_Shares_To_Anybody();
} while(VA_Does_Not_Disclose_To_SEC || shares_left == 0)
return A_Shit_Load_Of_Money_To_VA_And_Credit_Suisse;
}
These kinds of tort proceedings are very common. Of course, the lawyers who file the lawsuits on behalf of the shareholders typically represent only a small fraction of shareholders. These lawsuits are designed to mainly benefit the law firms which file them, rather than the stockholders. (This, BTW, is the case with most class action lawsuits because they aren't adequately regulated. Lawfirms constantly defend the broken system by claiming that Big Corporations are trying to stop you from suing them.)
This is vulturism, and the whole field needs reform. However, President Clinton has pushed hard against every kind of tort reform effort. Hopefully we'll see something in the near future to stop these stupid and predatory lawsuits.
Well, their stock symbol is LNUX. If you want, you can blame VA for taking that symbol, and thus causing confusion. *shrug*
--
You are quite right. What is particularly interesting is that this was actually a common practice with hot technology IPOs , VA Linux is simply getting the short end of the stick from investors who are pissed of by the stock's massive drop, most companies that drop that far are usually hit by lawsuits from shark's masquearading as lawyers and it's actually a surprise that it took this long. Unfortunately what this means is that if this lawsuit sticks ta lot more tech companies that IPOed in 1999/2000 may face heat for what was at the time a common practice.
PS: Another questionable practice that was quite common in 1999/2000 was giving away lots of shares by CEOs of IPO-track tech companies to executives of potential customers. These executives then made sure the IPO-track company won whatever contract was being vied for which would then make the pre-IPO company a hot stock when it burst on the market.
E.g. www.routerparts.com gives Cisco exec a few shares before their IPO and places him on their board. Cisco exec then makes sure routerparts.com gets a large order from Cisco and tells all his friends about them. routerparts.com now has good buzz since it has made deals with Cisco and other companies and becomes a hot IPO stock. Finally, the Cisco exec unloads the shares and makes several hundred to a few million dollars.
Grabel's Law
Sounds to me like ol' Bill needs to be beaten, all right... with a frigging Louisville Slugger.
Why is it our culture/society puts up with destructive assholes like him?
--
--
Don't like it? Respond with words, not karma.
Yah, shit, now he has only $600 000. Unless he wisely sold stock earlier, in which case he likely has well over a million bucks kicking around.
Lessee... $1 000 000 invested to earn 10% annual interest = $100 000 a year for life, without touching the principle.
Shit, ya know, I think I could go for that.
--
--
Don't like it? Respond with words, not karma.
By your rational the whole market (under any conditions) is a con. By extension any form of sale (for cash) or barter is too. Any place where I as a merchant try to sell something to a buyer is. After all, I'm going to proceed so as to make my goods appear as valuable as possible (to all buyers).
people finally realizing that there is no way these companies can sustain their market cap
Nope. What caused the crash is people stopping to believe that everyone else was believing. Its all about consumer confidence... which is like a shared halucination. I think that the market is going to go up, and that I can make money buying this stock. Whats more a lot of other people share the same belief, so the stock keeps going up. As long as more people believe that they can make money then those that don't, the stock will keep going up. The market cap (total value of all shares) is a manifestation of the shared halucination. The real things are the earnings per share, the profits and so on. Economists have been warning for months, if not years, that there was a stock bubble and grinding their teeth about how bad it will be when it bursts. Their main point has been that by all (what had been up to now) rational indicators (earnings etc) these stocks were not worth what they were being traded for. But their words fell on deaf ears. Everyone believed that yahoo was work 200+$/share. After all, all of america can't be wrong. But the moment the halucination ends yahoo is worth (relatively) peanuts.
--locust
Taco doesn't have millions of dollars. He was paid about 6 million in VA stock for the Slashdot buyout. That was over a year ago when VA was selling for over $100/share. Now that it's around $8/share he only has a fraction of what he once had. If anyone should be pissed at VA, it's Taco.
-atrowe: Card-carrying Mensa member. I have no toleranse for stupidity.
The "Lerach" bill
Year 2000 suits
And on Red Herring
When they got sued and lost
Sorry, but anybody who paid the ridiculously high prices in the post-IPO environment and is now sitting on big losses has nobody to blame but themselves (and possibly their investment advisors).
Any sufficiently advanced technology is indistinguishable from a rigged demo
--Andy Finkel (J. Klass?)
or maybe they've just established a company that does very well in pursuing class action lawsuits so based on reputation, people retain them for the lawsuits.
ever think that maybe people can do legitimate legal work that involves suing people?
How does Hemos get so far ahead of us?
--
--
Poliglut.org: 75 Million gun owners can't be wrong
Looks like one allegation is that the underwriter illegally inflated the opening price of the stock. The irony here is that many of the people who participated in the IPO, a portion of whom were open-source contributors who were given a few hundred shares each, benefitted enormously by purchasing the stock at the IPO price, and selling it immediately at or near $300. It was a nice windfall for a lot of hackers that was apparently the result of some illegal back-room banking.
"Bend over and enjoy it!"
Hooptie
"Heavens, it appears that my weewee has been stricken with rigor mortis!" -- Stewie Griffin
If the class action suit fails, can we sue the law firm for making our shares of LNUX drop? Maybe a class action suit is in order...
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Look at the name VA Linux - 'Linux' is the largest portion of the name
This lawsuit is about the aclaimed practices of VA Linux during their IPO - Their sticker name is LNUX I believe (or something very close)
One of the company's biggest focus is on Linux
Any ( and probably all ) these reasons could be why the lawfirm chose to use 'Linux' as the abbreviation of VA Linux. It really does make sense when you think about it.
/. is a commercial entity. goto slashdot.com
He can and he should. A big one.
Baker's Law: Misery no longer loves company. Nowadays it insists on it
http://www.sigsegv.cx/
You mean carefull, not cluefull, right? As they have set themselves up for a trademark infringement suit. And a good one...
Baker's Law: Misery no longer loves company. Nowadays it insists on it
http://www.sigsegv.cx/
Geez - all of a sudden Bill G. sounds like the warm and fuzzy type.
If you ignore the 100s of paid developers that work for VA, producing nothing but 100% free open source code for Linux, you'd be right.
Hmmm... Had a look at the second linked webpage. It contains some guff, followed by a bug button saying:
"Click Here to Retain Milberg Weiss"
Now there's a nice target for Amazon to sue... Or maybe they (milbergweiss) already have a patent for 'one click lawyer retaining'?
Sorry, I dislike lawyers and everything related to them. My parents taught me not to lie. Guess their parents did the same, but they obviously interpreted it as 'lie if the price is right'. 'Nuff said...
--frank[at]unternet.org
But if I did, I could sue 'em, right?
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on January 11, 2001, on behalf of purchasers of the securities of VA Linux Systems, Inc. (``Linux'' or the ``Company''...
Further reading of the article produces such phrases as "The action...[is pending]... against defendants Linux, Credit Suisse First Boston Corporation...
They're suing "Linux"?
Any sufficiently well-organized community is indistinguishable from Government.
You forgot to include such gems as:
[...] On December 9, 1999, Linux completed an initial public offering of 4.4 million of its shares of common stock at an offering price of $30 per share (the "Linux IPO"). In connection therewith, Linux filed a registration statement, which incorporated a prospectus (the "Prospectus"), with the SEC. [...]
can Linus [Torvalds] file a countersuit on grounds of FUD, trademark violation, and general idiocy by means of legalese?
// zyqqh
1. There was something like a 'friends and family' program with the VA Linux IPO, where certain people got shares of VA Linux at the IPO price (this is common in IPOs).
2. VA Linux's underwriter, Credit Suisse ('CS') had a 30-day option to sell even more shares of VA Linux at the IPO price, up to 15% of the number of shares in the original IPO (this is also common in IPOs; the underwriter generally exercises the option and sells the shares if the IPO is a hot one).
3. The complaint basically says that these 'friends and family' shares and option shares were sold by CS to certain people in ways that gave CS extra benefits, hurting investors who could not buy these shares at the IPO price from CS.
4. This has been a sore topic for the SEC lately, where certain people get shares at the IPO price, and then can turn around and tell them immediately after the IPO, turning a very large profit, quickly.
5. It really has nothing to do with VA Linux itself, other than the mechanics of VA Linux's IPO.
6. This is a personal interpretation, not a legal opinion.
"In periods of decline such as the present, the higher truth lies in madness." -- Juergen Habermas
These sorts of shenanigans have been going on for years precisely because they're not actually shenanigans: they're just a normal part of the process. When you start a company, it's your business whom you pick to be your partners. It's the same with initial public offerings, except those are even more democratic in nature.
When Redhat went ipo, plenty of people active in the opensource movement got a special offer to join the IPO, and slashdot was abuzz with the excitement of it all. This with VaLinux is just another kind of special offer. Nothing to see here; move along.
Read the rest of this comment...
so this has nothing to do with Slashdot's duty of care its cronically addicted posters? ok, just checking.
How we know is more important than what we know.
From what I gather, the underwriters (Credit Suisse) were paid to pre-allocate IPO shares to certain investors, and also made quid pro quo deals, where investors were allocated IPO shares in exchange for guaranteeing that they would buy shares at a certain price at a later date. I'm hazy on the SEC rules regarding the first allegation, but I'm pretty sure the second point constitutes illegal price fixing, and is quite verboten. Could be wrong, tho.
The whole VA IPO was pretty strange. The "friends" (some Open Source developers and such) each had the option to buy 100 shares of VA at $30 provided we all filled out the right paperwork ahead of time.
The strange part was, two days after the IPO (while frantically trying to get a confirmation that Credit Suisse had indeed received all the paperwork and actually pay for the shares) I mananged to get in touch with a CS broker. She then said that VA had a new plan where I could purchase an additional 30 shares at $30 and would I like to do that? I was completely baffled that they could do this. The current market price was close to $300. Who wouldn't want to take that deal? Zero risk, big gain.
I immediately sold those 30 shares for about $4800 profit. Those of you who think this math is wacked need only recall taxes, etc. At least I paid for all the money I forked over to buy the shares initially so I don't feel so bad that they're nearly worthless now.
Perhaps this little "extra" is the problem some investors have with Credit Suisse. It did seem a bit arbitrary that they would offer this to people after the IPO had happened. It's one thing to sign up for an IPO where your committing the purchase price regardless of the outcome of the IPO and a whole different thing to choose after the fact if you want to buy more at the same price.
I'm posting anonymously since many people are still bitter about not being on the VA friends list and I don't want to rub it in anyone's face that I made it on.
1) VA Linux isn't being sued for the allegedly fraudulent practices of CSFB. It's being sued for a violation of section 11, which imposes liability for misstatements or omissions on the registration statement of the IPO. One of the required bits of info for the reg statement is a description of the underwriter agreement(s). VA Linux obviously didn't disclose exactly what CSFB was doing (either because it didn't know, or because it didn't want to), so it can be liable because of the omission/misstatement. It doesn't have to be shown that VA participated in the fraud in any way; VA is strictly liable.
2) CSFB is being sued not only for VA Linux's charge, but also for fraudulently selling some of its allotment of shares (a 10(b) violation and a section 12(a)(2) violation). While 10(b) is pretty broad -- and thus VA Linux could feasibly have been within its net -- Milberg probably thought it couldn't allege all the elements of a 10b-5 violation (most likely because it didn't think it could allege that VA knew about what CSFB was doing) to include VA in the count.
3) VA's and CSFB's counsel has defended more securities class action suits than any other firm in the nation. Suffice it to say they're well-represented.
Read that article...it describes some of Lerach's tactics in detail, tactics which you can bet your ass he and his partners will employ against VA Linux. (He once sued Sun Microsystems simply because he got left out of a $30M lawsuit settlement; Sun eventually had to pay him $1.5M just to get him to go away.) And check out this Fortune sidebar, too...not even Pikachu is safe from this man...
But he can be beaten...just check out this article...
Eric
--
Be who you are...and be it in style!
to give you an idea of just how fantastically successful VA's IPO was, just let me say this:
according to Bloomberg analytics, VA had the best first-day performance of any IPO during Q4 99. they beat out 160 other IPOs for the largest first-day gain of 797% (from IPO price of 30 to close at 239 1/4). and it went even higher, to 252, in after-hours trading that day.
so i don't find it tough to believe that funny stuff was going on.
-----
ever think that maybe people can do legitimate legal work that involves suing people?
Theoretically, yes.
In this case, they're lawyers. So the answer is no.
.sig: Now legally binding!
I should file as a co-plaintiff, and maybe "make my millions" of this case???
If you're not part of the solution, you're part of the precipitate.
Now VA Linux is being called "Linux", rather than Red Hat. I was getting tired of RH == Linux and vice versa!
Actually VA makes _wonderful_ equiptment. It is all completely tested. I remember once VA found an obscure memory problem that occured with certain memory chip /mobo combinations. You have to be really watching to find stuff like that. And, they found this before shipping, so they went back and designed and tested a unit that did work. VA customers never have to worry about poorly-made or poorly-tested products. The only have about 8 base server models to choose from, so you can be sure its very well tested. Also, the construction is very good, too. I've never seen anyone use Teflon cabling for internal SCSI buses. Those cables cost over a hundred dollars, and VA uses it for internal cabling. You are talking to a _very_ satisfied VA customer.
Engineering and the Ultimate
Bloody leaches.
ALL God save your majesty!
CADE I thank you, good people: there shall be no money;
all shall eat and drink on my score; and I will
apparel them all in one livery, that they may agree
like brothers and worship me their lord.
DICK The first thing we do, let's kill all the lawyers.
CADE Nay, that I mean to do. Is not this a lamentable
thing, that of the skin of an innocent lamb should
be made parchment? that parchment, being scribbled
o'er, should undo a man? Some say the bee stings:
but I say, 'tis the bee's wax; for I did but seal
once to a thing, and I was never mine own man
since. How now! who's there?
2 KING HENRY VI, ACT IV, SCENE II.
Shakespeare, of course.
There's nothing quite so nice as having *all* of the Bard's works on your hard drive. It's available on line, but it's been a while and I forgot where I got it. All I have to do is grep for stuff and I can make myself look like a real highbrow on the Internet.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?