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Turbolinux Pulls IPO
jeffersonebell writes "Today Turbolinux becomes the latest software company to pull its IPO.
Story is here. They sight "current market conditions" as the major reason behind the move." I suspect that most people had figured this would be the case - now isn't the ideal time for an IPO.
They don't sight. they "cite".
Moderators: I don't give a fuck if you moderate me down. I'd rather be correct.
Again? But that trick NEVER works!
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Hell, now isn't a good time to work for a potential Chapter 11 company. The stock options that used to entice people into employment are now meaningless, since the companies have stock values so low (or, like Turbolinux, can't even make an IPO). Everyone's watching FC right now, and the companies can barely keep any bad news held within the walls of their buildings.
This recession isn't just about plunging stock values. It's about the loss of trust between companies and their employees.
"Ancillary does not mean you get to rule the world." --U.S. Circuit Judge Harry Edwards, speaking to the FCC's lawyer
Analyst: Due to the fed's refusal to cut the rate down to .002%, no one should invest in the market until they do. The entire country's financial wellbeing depends entirely on the Dow-Jones Industrial Average and the NASDAQ, so you should listen to everything I say and take it as god given blah blah blah blah blah blah....
Me: Welcome to the real world, Chester, where the stock market is a reflection of the current economy and not its primary driving factor as has been widely seen as the case due to all the dot.com millionaires. You don't think these guys got rich by making and selling a product or service, do you?
It's GOOD that they've decided to pull their IPO and concentrate on building their business through what could end up being a rough economy. This indicates sound thinking and a desire for their business to survive rather than a hot-headed lust for bottom-line profit.
If you're really interested in making money off of a privately-held Linux company, approach them privately and not through a broker. Tell them that you've been watching their company and are impressed by their performance. Tell them that you'd like to become and investor. Sink some money into them and sit back for a while that money is wisely spent, in the case of a company like TurboLinux, who is actually turning a profit.
Down the line, you'll see the long-term benifits over trading public stock.
IANAA (I am not an accountant.)
The next Slashdot story will be ready soon, but subscribers can beat the rush and slashdot the links early!
I'm surprised they could find a venture capatilist who would even consider their IPO, or maybe that's why they're pulling it.
The markets are in a slump. It may end up being a full scale recession, but as of right now it's just a slump. IPO is for stable/growing markets.
Too bad people gave Clinton the credit for Regan and Bush's economy and now that Clinton's economic policies are coming home to roost, the same people want to blame someone who has been in office for less than a hundred days.
Now, maybe people will figure out that Democrat's economic policies are BS and maybe we can get the market back to rising and TurboLinux can IPO with a proper market to do it in.
DanH
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Does the combination of economy sucking and energy crisis worry anyone else?
Especially in the heady days of years gone by, the initial buyers in an IPO were a select few (patrons of the underwriting brokerage, political bigwigs, etc.). You could very much make the argument that a company's principal owners get screwed when the $10 IPO goes to $50 right away - they could have given up less ownership to raise the same amount of capital. That's the job of a responsible underwriter to ensure that doesn't happen.
The only market conditions that have changed are that suddenly, profits actually matter (gasp)! What next, will shareholders actually expect dividends on those profits? When that happens, all hell will really let loose...
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TurboLinux makes their money selling their cluster server and high availability cluster servers to everything from big businesses to research institutions.
Their 2-node clustering solution sells for $995 and the 10-node version for $1995. They also offer data server products optimized for DB2 and Oracle 8i, which costs $2,500. These products are aimed at businesses that those prices as a small price with high returns. Combined with support and consulting, TurboLinux is able to make some revenue.
And the Fed doesn't control either of them.
From the washington post
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It's not a combination, it's roughly a cause and effect.
As energy prices go up, their burden on the economy increases, and the economy tanks.
Remember the gas crunch of the early 70's, followed by 70's stagflation?
Remember the Iraqi's taking over Kuwait and the mini-recession of 1990-1991?
Of course, all the SUV's on the road are not helping things.
And a President and Vice-President with serious ties to oil and energy companies have far too much of a vested interest in raising oil prices. The companies that are going to do well in this recession are the oil companies.
Finally, wanna guess how much oil is used to generate California electricity? Very little, it's mostly natural gas, some nuclear, some hydro and some wind. California energy consumption is about where it normally is, the utilities are just scamming you all by taking power plants offline.
I mean, seriously, to post about a Linux company's troubles is like to post an article about the sun coming up in the morning. Let's talk about something new.
As far as Safari goes, is it possible that I just missed the article on it? I can't believe that Slashdot wouldn't mention something this big. If you haven't seen it yet, it's O'Reilly's plan (they've already started) to put all their books online and offer different subscription plans to use them (links: "Safari itself, and about the design of Safari). There are so many things to discuss about this approach (which seems pretty innovative), from simply whether or not it will work. I'm definitely interested and almost signed up for it last night. Anybody taken the plunge yet? (The lowest plan is $9.95/month, if you don't feel like checking out the link.)
And whether you like it or not, HailStorm could change everything from the way that we know it. The fact that AOL and Sun were courting government officials for breakfast to talk about new anti-trust action two days before Microsoft even announced this should tell you how seriously they're taking it. There's a ton of different angles that it could be talked about, whether it's positive, negative, or how other organizations could work with it or duplicate it, but I guess Slashdot is waiting for an appropriately negative article about it before they mention it. ;)
Cheers,
As for the rest, California energy consumption has increased dramatically over the last 5-10 years, but due to regulations, power companies have been unable to build more plants. The prices are frozen, so by not producing power, the power companies would have much lower profits. They can only make money when they sell their product.
"The question of whether a computer can think is no more interesting than that of whether a submarine can swim" -EWD
I don't believe that's the case. The word "media" is plural. It's also one of the most misused words in the language! Come on, don't mod this thread as Offtopic - what's so bad about a discussion around the proper use of English?
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No, I think he was thinking about LinuxOne.
You are probably thinking of LinuxOne...
Do a search for "linuxone" and "fraud"...
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A dingo ate my sig...
They're big banks who broker the IPO. They also esentially write one big check for all the stock and it's up to them to make sure investors buy it all.
So if they can't find enough investors who are interested in X shares at Y price, they take the hit.
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Also, while the traditional point of an IPO was to raise money, that became a secondary result with dot-coms. Most of them only issued public stock for a small fraction of the company and most had no use for a large pool of capital anyway. The real point was to get a spectacular run-up on the post-IPO price to make the founders, insiders and friends rich and to create valuable stock to use to acquire other stupid companies.
That's why when, say, VA Linux went out at $~40 and went up to $320, it was viewed as a good thing. If they had cared about raising money, they would have sued their investment bankers for malpractice.
Unsettling MOTD at my ISP.
When you sell stock, you aren't selling it to the company that issued it (there is an exception known as a "stock buyback," but that's a different story).
You are selling your shares to a broker or a "market maker" that trades in the company's stock. They, in turn, sell it to someone else. If a company's stock loses half its value in a day (or doubles in a day), the company doesn't lose (or make) any money at all. The affect of the stock price on the company is a bit more indirect. It affects market perception of the company, the ability to attract employees by using stock options, and the number of shares necessary to buy other companies using stock swaps.
I'm far from a market whiz, but wouldn't a bear market be a good time to IPO? There's nowhere to go but up. Look at all the pretty dotcoms who IPOed recently that crashed along with the market. If TurboLinux IPOed now, one would think they would climb as the market recovered (assuming it does).
Obviously there are a lot of smart people who made the decision not to IPO, so there must be a reason that I have no clue about.
I think it's rather assinine to fail to attribute to President Clinton the success of the economics market during his second term in office.
Granted, part of the reason for the boom was the military decline started by the first Bush administration, which pushed companies into R&D on consumer goods instead of government goods. This was a good thing, and I find it disappointing that the new Baby Bush appears to want to go back to the cold war economy that led to foreign countries out competing us in industries we used to be leaders(automobile, television, radio, etc).
But a large reason for the boom was simply the Clinton administration hands-off policy with regards to the economy. Actually this is the prime difference between Clinton and say Reagan. Reagan had a in-your-face style of government, whereas the Clinton government just didn't interrupt peoples daily lives much at all. It gave people time and opportunity to concern themselves with other more important issues.
The only real example of the Clinton administration mucking where they shouldn't have is with the Microsoft lawsuit. There was a recent Forbes article which attributes much of the malaise in the tech market to the Microsoft lawsuit. Essentially pointing out that the tech companies were really just riding on the coattails of Microsoft.
There was another article, I believe in either Salon or Slate, which I read which pointed out another factor of politics and the market. The Baby Bush administration favors the old Republican standby companies... Big Oil, Big Manufacturing, Defense, etc. But not technology, etc.
What that article pointed to is that the market is now shifting with the political winds. Tech is gone, the new administration isn't gonig to promote it. But the other industries stocks are doing quite well.
For instance, go check out the stock charts on Raytheon, an old Bush family defense company. It hit it's 52-week peak in early February, while the tech market was still blundering into oblivion. Even though it's down in the past month, it's still considerably above it's 52-week low from last April.
Face it. The Clinton administration was good for Technology. Look at just a handful of the positive things he did as President for our market:
- Eliminated the GPS satellite encryption
- Raised limits on super computer exports
- Nearly eliminated limits on encryption export
- Provided funding and an atmosphere of regulations which encouraged internet expansion
and so on.
Under the Bush administration you won't see this type of cooperation. They have already began talk about again restricting computer exports. I fully suspect even the encryption export restrctions will once again be "reviewed" and then later reverted back to their old form.
Where's the focus been just in the past 100 days? Oil and Energy companies.
The writing is on the wall, it just takes some intelligence to read it.
Think about it - without the prospect of receiving a dividend (sharing in the company's profits), what is the financial justification for buying a particular stock??? There is none, other than the hope that someone else will come along and buy it from you at a higher price. And why should they pay a higher price? Because they think that there's an even greater fool out there.
One of the biggest problems with our current tax structure is that your typical stock trader would pay less in capital gains taxes than they would on dividends received, so there's a tax incentive to steer away from dividend-paying companies. That trend takes away one of the fundamental means by which stocks can be evaluated.
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