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Red Hat Vs. The Lawyers
ajs writes "On July 13, Red Hat announced that they would be re-stating their revenues for the last 3 years. This sent a shock-wave through their stock price, but early analysis seems to indicate that it's not that big a deal (the end-result is the same for a given contract, but it will be counted toward a different month). But then the really bad news hit. [Opportunistic lawyers] are taking this opportunity to punish Red Hat for reporting the change and the resulting drop in price. Red Hat is doing well, but can they weather major class action law suits without harming the business? How have other technology companies dealt with this sort of suit?"
It's no wonder some companies cook their books. Sometimes you're damned if you do and damned if you don't.
I'd really hate to see Red Hat take a huge hit from something stupid like this.
This is freaken sad. SCO has not been investigated by the SEC by Redhat was? My tax dollars at work.
Nows the time folks....buy up
lick the cancle button (at least thats what our Chinese QA says)
...it's going to hurt.
The longer you go, the worse it's going to be. The best thing is to deal with it as soon as possible and get it behind you. If you wait, it makes it look like you're hiding something or biding your time.
But it appears that the crux of this case is that Red Hat must prove that the mis-stated earnings were the result of an honest mistake, not intentional fudging (*cough* Enron */cough*).
That makes it sound simple, but Red Hat will still have to fork out enormous legal fees to win this case, or settle with the firm (hereafter referred to as "ambulance chasers" or "greedy bastards") and fork over cash that way.
Red Hat is probably in a better position to handle this than most Linux companies (with the obvious exception of IBM), but it has already hurt their stock price, so we'll just have to hold tight and see.
If my answers frighten you, stop asking scary questions.
Rad Hat has annual revenue of less than $150 million. And a market cap just south of $3 Billion. A price/sales of 20. I'm sure Red Hat is a good business, and will continue to grow, but they have to grow a lot to justify that price. And since much of their revenue is for service, their costs will grow as their sales grow (in contrast to Microsoft's Windows monopoly, which requires very few marginal expenses for each sale). Nice company, can't imagine their stock will be much higher in 5 years.
I wish , just once.. a company I owned stock in would restate their books in a positive manner... ie: oops, we forgot to count that extra 200 million worth of revenue.
That'd be a pleasant change.
From reading the submission blurb it seems that those impeccable white knights on horse just made a mathematical error (must've been using an older kernel) and the resulting slump is pure emotion by the investors.
Well, it's not. RedHat's Q4 2003 earnings are now $0.02 instead of $0.03 which is either a 33% or 50% reduction, depending on which way you count, and the stock fall represents just portion of that.
Also, even after fall, Red Hat trades at 133 P/E, which is way overvalued even for this sector (MSFT, for example, is at 40.59).
People don't like to be lied by management when they invest their money into the company, and people will launch lawsuits when they deem something inappropriate had been done.
Isn't it just grand how thousands of very intelligent geeks spent countless hours creating and improving Linux and Red Hat, and now a bunch of doughy, pasty-faced vultures at "Goodkind Labaton Rudoff & Sucharow LLP" will rake in an assload of cash from this?
God, I really hate the American legal system.
Ya think? Microsoft, doing devious things against a Linux provider? Come on, how likely is that?
Now is a good time to make sure you have a local mirror of fedora.
That just seems a bit tinfoil hat like to me. I think some days we give too much credits to the boys in Washington. Besides, it's not in their track record to do it that way. I believe their best bet to play the game the old way would be to buy Oracle or IBM in an effort to stop them from using Linux
As a rock-in-roll Physicist once said, No matter where you go, there you are.
RedHat was following the rules (particularly the ones about switching auditors), and their new auditors convinced them to use a slightly different accounting method for their subscription accounting. It looks as if their previous accounting method was not neccesarily incorrect, flawed, or false - just different.
How is it that someone can bring a class action lawsuit against a company for changing their accounting practices from one one allowed method to another allowed method?
"Great men are not always wise: neither do the aged understand judgement." Job 32:9
People don't like to be lied by management when they invest their money into the company, and people will launch lawsuits when they deem something inappropriate had been done.
I suppose some of 'em will, but this holder of a non-trivial number of shares of Redhat stock, sees this as a ploy by an external hostile force (the lawsuits, not the restating, obviously). As such it pisses me off more than it makes me want to take part in such a lawsuit.
If there's a class-action lawsuit, I will take the proceeds and dump it right back to Redhat, in the form of subscriptions or straight donations. The P/E ratio isn't relevant to the fact that some sleaseball lawyer, probably in Redmond's pocket, is making a stink about this.
That having been said, it's a true sign that you're succeeding when your competition feels threatened by you. Sleep well, Bill... the penguin is gonna get you.
...after you WIN the lawsuit (as per Sun), or after your fortunes fade (as per Apple). Next thing you know your company's viable again, and besides you don't really need your soul while you're still alive do you? :-)
These posts express my own personal views, not those of my employer
The worst part about this bullshit is that they refused to run this story until they could dole it up with enough flamebait to point the finger at someone other than RedHat.
Look into the company that owns this site, VA Linux, and the scumballs who took it public.
Red hat is being sued by its own investors, what do they hope to get out of it? Their own money back... If the share price is now lower than when they purchased their shares, and Red Hat have to write the legal battle off as an expense then the money these investors hope to gain back would be much less than if they just sold their shares and walked away.
Case of cutting off your own nose to spite your face!
Red Hat has college scholarships for talented programmers.
I think the Motley Fool article is right. The drop in the stock price makes Red Hat a good buy right now.
The downside is the frivolous lawsuit. In the end RH should prevail, but it will spend a pretty penny defending itself. I'm all for class-action lawsuits when they are appropriate. This one against RH is not.
Tort reform is one of the few issues where I side with Republicans. Fair implementation is going to be the hard part.
This isn't the typical "ooops, we recognized all the revenue of that 5-year contract this quarter" shin-an-igans that you typically read about - this isn't that huge of change - as referenced in the article, take a look at the restatement table and the net income/loss per share hardly changes.
Hulk SMASH Celiac Disease
Then damn news broke on 2004/07/13. It is now 2004/07/14. A one day delay is very good for /.
I patently reject your characterization of me as an "ambulance chaser." I am one of the many investors who lost significant amounts of money in redhat stock,
.com bubble bursting, not a trivial restatement of earnings. The only thing you can claim to have lost as a result of this is today's change in price.
Waah. I bought in on the day it opened at about 50, got out of half of it at 300 (pre-split), and kept the rest. The paper losses are a result of the
But, by all means, please do sell while it's undervalued, I'll be buying up your shares. Any lawsuit here is strictly driven by greed, either yours for not knowing when to get out (welcome to the stock market, it's gambling, deal with it), or (ahem) somene else's greed in trying to hurt the competition.
That's what happened to Freddy Mac. The stock still tanked, as I recall. But then it recovered and has done well.
As I recall, the issue was that they understated earnings to build a buffer they could draw on in future leaner times.
Search Yahoo Finance news for "Class Action Lawsuit" and you will see that there are lots of them being filed and not only on tech companies.
What!! But businesses are evil. Sure they employ millions of people. Sure they're double taxed, so they foot the bill for a lot of roads schools and social programs. Sure they sponsor activities like Junion Achievement, after school programs, boy/girl scouts , etc. And then there's the donations made from the companies themselves as well as directly from the employees and the unions, which the corporation directly and indirectly support. But other than that, .001% of all businesses are corrupt! Therefore they should all be destroyed and we should live in anarchy.
...or could those WTO protesters and all the drug-fuled brain-power of "Rage Against the Machine" be wrong?!?!
--
The Marines: The few, the proud, the not very bright. - Slashdot tagline 04/21/05
This is going to be an interesting one to watch play out over the coming months.
Let me say it first, this could be where IBM swoops in, plucks Redhat off the floor, leaves Redhat do Redhat things and everyone lives happily ever after.
No more Micro$oft bashing from me. Its like bashing at the special olympics.
I'll take two lawyers over an MBA any day of the week, especially when the MBA in question had middling grades, couldn't get into school without daddy's help, and couldn't run a profitable business to save his life.
fuck you.
Class-action suits against a company for mickey-mouse bullshit is repulsive. If the company was actually doing something sleezily financially bad (eg enron) or dumping arsenic in the public water supply, then these class-action suits are deserved. But suits merely because of stock-price slippage are pathetic. I bet you wouldn't give 2 shits if the same tactics you decry redhat of have earned you money. But since you lost, you can't blame yourself, you're too smart to have made a bad decision. Yeah, blame redhat.
It's asshats like yourself that have destroyed the society and culture that used to exist in the West. Now companies first priorities are their investors, not their customers nor their product. It's pathetic, and that's exactly the reason why all prime-time TV is the same and sucks, why restaurant chains and consumer food companies use shoddy unhealthy (but cheap) ingredients (eg high-fructose corn syrup and MSG), etc. Because the companies have to look after your ass because you invest in them.
I think if you invest in a company, you should that company and have to bide by it's decisions. If those decisions make the stock go down (as long as it's ethical) than tough shit. Now the lawyer in you is probably defining 'ethical' to mean whatever takes care of investors the most. If you are thinking that, then you REALLY are a lifeless asshat that is destroying our society.
This happens all the time. Some lawyer gets it in his head that they can make a killing by filing a lame class action claim, brings in a bunch of suckers who "lost money", and then tries to go after the company in question. In some situations they prevail but only if there's enough evidence lying about to make the claim. The majority of this crap is dropped eventually.
If Red Hat executives have don't nothing wrong, the suit will go away and just look at how cheap RH shares are going for these days.
Is it possible to sue the class action lawyers for causing an additional artificial drop in price? I understand the anger, but really, this is just a simple issue of conforming to the myriad of rules.
Funny how this seems to have gained momentum almost overnight, but yet the real crooks are continuing to operate. I'm not just talking about the Enrons, I am more concerned with the fund managers and such. The ones who pimped such winners as Worldcom (and refused to sell it when the end was inevitable(sp?).
I really hope that the courts can knock this class out early.
--WooooHoooo--
About a month ago, Red Hat suddenly lost their CFO. Immediately thereafter, they pre-released earnings in order to cushion the blow. Now we find out two things: (1) the day before the CFO left, their auditor complained about their accounting practices, and (2) they recently received a request for information from the SEC. They didn't announce either of those facts during their extraordinary earnings release or at any time since then.
Like it or not, those are both material facts. No, the accounting change isn't all that significant, and yes, most SEC audits turn out fine, but that is irrelevant. They did things to prop up their stock price, and didn't publicize all the news, limiting themselves to the better news. To the extent that they propped up their stock price by selectively releasing only positive informaion, they're in violation of their fiduciary responsibility to their shareholders.
Blaming the ambulance chasers for Red Hat's misbehavior is like blaming Janet Reno for Microsoft being held in violation of the Sherman Antitrust laws. Just like MS, Red Hat did this to themselves; the attorneys are just doing their jobs by trying to hold crooks accountable for their crimes.
Of course not, Hollywood sctors and crackheads are never wrong. Did I just repeat myself by implying that Hollywood actors and crackheads were somehow seperate?
thisnukes4u.net
Take a look at the dates on the announcements... less than a day from the RedHat announcement of their changes to the announcement of the class-action lawsuit. Hardly enough time for a law firm to investigate and decide if the case really has any merit, I would think.
Even if the case has merit, that doesn't change the fact that the filing of the class action suit happened incredibly quickly... so quicly, in fact, that there's a reasonable question as to whether it was filed because they firm thought they would have a strong case, or if it was filed because the firm though there was a possibility that they might have a strong case.
Dude it was a press release straight from the law firm that yahoo picked up all the wires. Its nothing more than PR propaganda. read the top where it says "Press Release"
...suing a company that has all its intellectual property assets under the GPL. Are the lawyers going to try to get their fees from Bob Young's enormous collection of Tux plushies?
I agree with you. Head on over to Groklaw where this theory is being debated. The Yahoo board has comments as well.
Help fight continental drift.
That is why politics is all about choosing between the lesser of two evils.
thisnukes4u.net
They're gonna sue RedHat for making their stock a good buy?
Or are they gonna sue because RedHat corrected a mistake?
Or are they gonna sue because RedHat failed to cover up their mistake?
What part of this am I missing?
I'm sure it will all make sense when the price of oil drops and this law firm takes the oil companies to court because people will be charged less for at the pump.
. Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.
Kevin Thompson brings a unique blend of operational and financial knowledge from his experience with high-growth and multinational companies. He formerly served as a partner in the Global Technology Industry Group of PricewaterhouseCoopers LLP, where he directed stock offerings and oversaw mergers and acquisitions at public and private technology companies.
Prior to his position at PricewaterhouseCoopers, Thompson served as a senior manager for Arthur Andersen LLP for 10 years, overseeing public offerings and directing projects for companies in North America, Latin American and Southeast Asia. He is a Certified Public Accountant and holds a bachelor of science degree in business administration with highest honors from the University of Oklahoma.
I am the maverick of Slashdot
Ok, so two lawyers, lying trial lawyers at that that want to socialize America's healthcare system(which, in your opinion, may be the way to go), are any better than an MBA with less-than-honest ways of going about things? They are equal in my eyes. Until you throw in that John Edwards has no exprience at all in national security, then its a little in favor of Bush because he does have expirence, even if it isn't very good expirence. Being President through 9/11 has to count for something. Not that I'd vote for either one, I'd vote for Michael Badnarik personally.
thisnukes4u.net
Which they only did because the SEC was coming after them, and they didn't want to go to jail. Oh thank you redhat.
Actually, their auditors recomended they restate their earnings, and they did.
Microsoft held back signifigant portions of their Windows 2000/Office 2000 era earnings in a "cookie jar" that was supposed to level out revenue after the dot com bubble burst.
Which also cheats investors - the ones who had and sold stock that DIDN'T go up - or didn't go up as much as it should - because Microsoft understated their earnings. Investors are trading stock all the time, and while investment is not zero-sum a market distortion reified by a transaction during the distortion IS. It helps some investors by hurting others by defrauding them out of their money. Even if NOT reified by a transaction it may have produced an opportunity cost - as someone held stock they could have liquidated for more money to sieze some other opportunity.
There are tight rules on this.
Managers believe that investors like stocks that show steady upward growth rather than a roller-coaster revenue chart - even if the area under the roller-coaster is much larger. So some of them try to even things out by pushing parts of windfalls into the next quarter, rather than taking it when it comes and creating future expectations they can't meet.
My preference would be to take the money and run - then in the post-report conference call tell the analysts that's what we did, what the numbers WOULD have been if we'd fudged, but that if another windfall happens (and we don't get beaten up in the market THIS time) we'll take the money and run again because it's stupid to leave it on the table. Then the analysts can set reasonable expectations for the next quarter.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
How the hell are these people "ambulance chasers"? There's no ambulance here, just the kind of shady accounting that we all decry when it's Ken Lay or the guy from worldcom.
And I love how the poster tries to make it seem like the lawyers are trying to sue because of the announcement rather then the act they were announcing (i.e. that they cooked their books)
Poster needs to get a clue. Maybe red hat did just make 'a mistake' but they're still liable for it.
autopr0n is like, down and stuff.
Well, there is the alternative. You could vote Kerry/Edwards and put some of the evil doers into that office.
Hmmm....the fox watching the chickens?
. Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.
Recently Raytheon settled a class action case against them by share holders. the settlement was for $410 million. of that settlement the law firm gets 10% or $41 million. Now everyone of those little share holders are going to see maybe $500 at most (and I think that is an estimate about 500x too big).
Now I wonder who got helped more by helping all those children or families? The companies sued? The families represented? or Mr. Edwards and company? For tort lawyers its all about the almighty buck. Support Tort Reform!
No offence but RHAT has not been a good buy for a long time, if ever. Not because there business model is bad, but because they have been *overpriced*.
If I bought Red HAt at any time over the past few years, based on my experience with investing and especially open-source (I make a living with open source myself) I would *expect* to lose money.
So if you lost a lot of money, don't complain too much, because some of us expected RHAT would experience it's "correction" even without this minor earnings restatement.
Yeah Red Hat should be held accountable, but it's just like the employees who put 100% of their holdings in Enron company stock. That's a dumb move even *without* the fraud.
Wow, where was your name mentioned in the article? Seems you're taking something personal that was in no way directed at you. Unless you're a lawyer, you can't be an ambulance chaser.
"Give a man fire, and he'll be warm for a day; set a man on fire, and he'll be warm for the rest of his life
I live in North Carolina and am a firm believer that all Edwards did was make himself rich and raise the cost of health care out of reach of a lot of middle class people. Every one of those suits just raises insurance costs.
In any form of liability lawsuit, only the lawyers win.
Professional Politicians are not the solution, they ARE the problem.
So you're saying that the SEC rules are a bad thing? Or are you saying that there should be no motivation for people to do the right thing?
You would prefer instead that a company, such as RedHat, be allowed, if not encouraged, to hide such errors?
. Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.
JFYI: Sucharow - is a "dirty" word in Russian.
Here's a little Google exercise for you:
Find out how many signers of the Declaration of Independence were lawyers.
Now look up those who signed the US Constitution.
Yep, more lawyers than any other single profession.
Here's another question:
What did Republican President Abraham Lincoln do for a living before he was elected to public office?
(I'll give you a hint -- it wasn't splitting rails.)
The particular law firm is a new one on me, usually these are done by that scumbag Bill Lerach in San Diego.
"Strike suits" are a basic fact of life for public tech companies. In fact, it kind of proves RH is growing up.
The idea is that any sudden movement of a company's stock, in either direction, is actionable because the company presumptively withheld information that impaired the public's opportunity to either profit or avoid losses. Eventually the lawyers quietly get paid huge $$$ to go bother someone else.
It's just ridiculous that judges even let this garbage into their dockets. Welcome to America.
Perhaps if Bush doesn't win then the GOP in the house and senate will wake up and realize that they aren't Dems and stop acting and spending like them?
You can't be happy with what the GOP has become, can you?
What the hell is with this moderation? This isn't insightfull, it's innane.
It sounds like this isn't the first problem with redhat, and I hope they can pull out of it. But a lot of people may have sunk money into RH thinking it was a good investment, and run by professionals.
red hat's earnings per share are dropping form a measly 3 to an even mealier 2. If you think that's "profitable" you're out of your mind.
autopr0n is like, down and stuff.
I worked at C-Cube, makers of the first MPEG video decoder chip, in the late 90's. It was great fun and it looked like I was going to make a fortune on my stock options.
Then the organized short sellers hit. Then the class action law suit. The stock tumbled. My options went under water. I made nothing.
Watch out Red Hat. These soul sucking vultures can destroy your stock price and your company. Your CEO will waste so much energy dealing with this distraction that your core business will suffer. Next employees will start leaving. It is a downward spiral.
It happened to me. My advice, take this threat seriously. Good luck.
Does anyone know why RH is restating their financial performance? Could they not have predicted the possible repercussions of their CFO leaving and now this and done something about it? Or did they understimate how people would overreact (if overreact they did)?
Redhat's P/E is an amzing 125.
autopr0n is like, down and stuff.
After the whole Enron thing, a large company (I forgot who) restated their earnings, and actually multiplied their revenues by 3. What they had been doing was storing money off the books so that they could keep their numbers good even when things were bad.
autopr0n is like, down and stuff.
Anyone can sue anyone else at any time, regardless of the facts.
It's like buying a lottery ticket. You're going to lose a lot of the time, but sometimes you win big.
If you were stupid enough to sell for less than what you purchased the stock for, that's your own problem.
This is insightful? Give me a friggin break moderators. Have you ever invested in the stock market before? If you buy the stock and the price starts to go down, you have a choice -- if you think it's going to go down more, you can limit your losses and sell. If you think it's going to go back up, you ride out the bad times. Sometimes you make the right choice. Sometimes you make the wrong choice. Calling someone stupid for selling a stock for less than what they bought it for is ridiculous. What's stupid is holding onto that stock, when all indications are that it will never rise again, just because you don't want to sell at a loss. And from looking at RedHat's stock profile since its IPO, it looks a bit unlikely that RedHat will ever again achieve the highs it once hit.
Sounds like me that they decided the booking for their system was out of kilter for one month and just adjusted the entries back by one. Unforunately, it is the ignorant masses that do not understand it; they caused the price drop. Personally, I would see this as a sign that they wanted a more strict book keeping, which on the face of it sounds like responcible accounting behavoir. Take basic accounting and you'll quickly realize there are many complex issues and multiple ways to be "right."
My two cents,
Bel, the mostly sane.. "Of course I can't see anything! I'm standing on the shoulders of idiots." -- Me
"Harvard MBA or the two lawyers"
Bush went to Yale, not Harvard.
Microsoft actualy has a very high P/E, the industry average is 20.
autopr0n is like, down and stuff.
... you can sue anybody for anything. It doesn't mean you'll win."
I like to repeat that saying to myself when reading about lawsuit X, which I heard from a very successful personal injury law firm leader.
IANAL, but it seems to me that this public admission of change from one acceptable accounting practice to another should help things blow over; we'll likely see this case dismissed.
It also strikes me as odd that they'd put out a press release about their shiny new lawsuit without a plaintiff.
Earnings statements are done within the US tax code. There is no one on the face of this earth that knows everything in that abortion. It's huge, with a hundred years of crap that never got deleted, and it changes every single year. It is impossible for the IRS to keep up with all of it, why should anyone be surprised if a mistake is made?
It's time to junk the whole thing and go far a flat rate with no loopholes, for individuals and businesses. It would end the cottage industry of lobbyists, lawyers and accountants that make a fortune translating, modifying, and manipulating the mess.
Professional Politicians are not the solution, they ARE the problem.
No, I'm not too happy with what either party has become. Neither seems to have much respect for the hows and whys of this country. The GOP is only slightly more "on track" than the Dems.
Maybe if I were rich enough I would like the feudal system the Dems prefer.
Maybe if I hadn't lived in the real world so long I would be able to believe that it's possible to please everyone all the time and be "Everyman" like the GOP.
. Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.
For the next 20 years, John dedicated his career to representing families and children hurt by the indifference and negligence of others. Standing up against the powerful insurance industry and their armies of lawyers, John helped these families... (from John Kerry's web site)
Ah...helping by taking doctors to the cleaners based on junk science claims, and topping off presentations to the jury by trance channeling the unborn. (See this New York Times article for details.) One wonders how such people live with themselves.
It's stupid to sell it for less than you purchased it for, and then blame anyone but yourself for doing so. Nobody is forcing anyone to sell stock (or for that matter, to buy it in the first place). Suing over stock losses (which don't become losses until you sell) is even more stupid.
I take that back.
Right.
So after looking at RedHat's stock profile you think that it's RedHat's fault that anyone lost money in their stock during the period in question?
"...you can limit your losses and sell."
Yup. Or not. That's your choice. But to say that RedHat forced anyone to sell stock during that period is......
Well, it seems pretty stupid to me. I'll let you choose your own word though.
. Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.
It's stupid to sell it for less than you purchased it for, and then blame anyone but yourself for doing so. Nobody is forcing anyone to sell stock (or for that matter, to buy it in the first place). Suing over stock losses (which don't become losses until you sell) is even more stupid.
I never said that attempting to blame someone else for stock losses wasn't stupid. In fact, I would agree with you that blaming someone else is stupid. I think there's a very sore lack of people in the U.S. (and in other parts of the world, from what I understand, though I can only speak of that with which I am familiar) who will accept responsibility for their actions.
My advice: grow up.
Sometimes you lose money on a stock. Sometimes you make money on a stock. That's true for everyone.
But everyone doesn't go crying to a lawyer every time they have a problem. Only a certain kind of person does that -- not the good kind.
I suggest if you really want your money back, you should just go rob a liquor store. As you point the gun at him, you could explain to the clerk that you're doing it because you're a victim of a small disagreement in corporate accounting methods.
Or you could earn it, like -- well, like a grown-up.
The GOP wants a Feudal system too. Look at all hand outs that Bush has signed into law. Someone has to pay for all that crap and the generations that have to will be nothing more than serfs if something isn't done.
Actually that's just the lie they would have you believe should you fail to believe the lie that one of them is actually the good guys.
There are more than two parties out there as well as totaly independant persons at all levels.
The third biggest party is the Libertarians, I tend to vote for them unless the candidate in question is a loser. But they are not the only alternative.
But they have no problem painting anyone not a (R) or a (D) as loner and likely a nutjob. They constantly feed the bad loop of you have to vote r or d or else your wasting your vote because almost no-one votes for anyone else.
This chicken-egg problem they love so much is like the problem linux has with games and some other software.
The ONLY way out is if people start actually voting FOR the candidates they want, rather than trying to figure out which of the two bought and paid for parties are owned by the least objectionable.
But it won't happen in one or even two election cycles, you have to vote consistantly for the best person out of ALL the choices constantly and urge your friends and familly to do likewise. It's the only way that doesn't involved a second american revolution or other scary-ness to get out of the current bought and paid for system where the people are just there to pay taxes and buy things.
Voting for the 'lesser of two evils' is still voting for evil.
Mycroft
https://signup.leagueoflegends.com/?ref=4c3ed6600b6ea
Aye, I realized that after I submitted it.
Tux did a hit and run on WHO'S car? And he's hiring Jonnie Cochran??? Oh boy...
Too true. I guess the thing about the GOP is that there is some sort of hope that it would be an investment that will pay off down the line. Not much of a hope but at least it's a dream.
The alternative is to be told by the Dems that you're too stupid to have money or even to have hope. Instead we should be thankful to have them support us. Thank you Master, may I have another?
. Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.
You know why RHAT fell so hard? Because I bought a few shares just a few weeks ago. Whatever stock I buy, the behavior is the same - it goes down the drain really quickly.
Now if RHAT pays me a million bucks I'll dump the stock and their problems may go away. Or they may not.
There's a great piece on this whole thing by Melanie Hollands in the IT Manager's Journal that goes into excruciating detail on this topic. RH is doing nothing wrong. It's a normal happening in the business world. The use of the term "Ambulance chasers" in the original post was dead on. I don't particularly like nor dislike RH but this kind of greedy BS that Goodkind Labaton Rudoff & Sucharow LLP are doing smells of the same stench as TSG & Microsoft.
--
If I actually could spell I'd have spelled it right in the first place.
So after looking at RedHat's stock profile you think that it's RedHat's fault that anyone lost money in their stock during the period in question?
.sig of your original post, you probably think that any suggestion of RH going bankrupt is sheer blasphemy.
Please point to where in my post I said anything even closely resembling this.
Yup. Or not. That's your choice. But to say that RedHat forced anyone to sell stock during that period is......
Nope, I still didn't say that...
RedHat obviously didn't force anyone to sell. But from looking at the chart, the stock stayed in the basement without moving for about two and a half years. Some would say that not making a profit off a stock for two and a half years, with minimal expectations for growth, would be a pretty bad investment. A lot like stuffing money under your mattress. And I know my financial advisor has never suggested that as a good investment strategy.
And when faced with that situation, I think a lot of people would (wisely) accept the loss and sell, and pursue more profitable ventures. Besides, there's always the real risk that the company goes belly-up and then you lose all your money. But, from looking at the
Just because people here think that Red Hat is a good company doesn't mean that Red Hat is held to a lower standard. An earnings restatement is an earnings restatement. If they did wrong they should suffer the paint that other "restaters" have felt. Subscription accounting models are very difficult to account for and have caused problems for many in the past.
Why wasn't "Pushing forward is a temptation but also bad." modded up as interesting? I mean, it was alot more interesting than the other 40 posts I read before it. Actually made some sense!
Also, for a previous poster, do you have a link to this "cookie jar" allegation - maybe some real proof? I must have missed it somewhere along the way.
Codifex Maximus ~ In search of... a shorter sig.
All they effectively did was change a "YY/MM" field to "YY/MM/DD".
sanity in an insane world.
P.S. - parent - stop reading the articles, those of us who read aren't supposed to post.
Oh crap, some men in suits are at my door.
cyn, free software and *nix operating systems enthusiast.
Get over it.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
ambulance chaser
n. Slang
1. A lawyer who obtains clients by persuading accident victims to sue for damages.
Does a class action civil lawsuit equal a "lawyer who obtains clients by persuading accident victims to sue for damages?"
These kinds of "sue them because the stock price dropped" are nuisance lawsuits, they happen all the time with publicly traded companies. No big deal.
jim frost
jimf@frostbytes.com
Bill Clinton was way more of a republican than Alren Specter. He is truly RINO (Republican In Name Only)
Finkployd
Anyone who had money in Red hat to begin with was a moron. It's a bad stock, period.
I generally will not disagree with you there. However, the post I originally responded did not say that it was stupid to invest in RedHat. If it had, I would not have argued the point. It said that if you sell a stock for a lower price than you buy it for, you are stupid. This, on the other hand, is a ridiculous statement.
Investing in companies with profit potential: GOOD [emphasis mine]
And that's why the original poster's statement is ridiculous. Profit is never guaranteed, it's only a potential. As such, even the best-looking investments can result in a loss.
Don't know about him, but as a registered Republican and one who voted for Bush, I'm not happy about today's GOP either.
But Repubs like myself can't be happy with a Democratic party that keeps leaning increasingly left either. I agree with the criticisms from within that party, from people like Zell Miller. The Republicans are floundering, and the Democratic party is squandering a golden opportunity by going in the opposite direction that they should be.
Making John Edwards a VP is merely a token nod. Just as Lieberman as a VP candidate. Leaning the party more towards these men would pull me from the Republican party in a hurry. At least until the Republican party remembers WTF they're supposed to be about.
Isn't it just grand how thousands of very intelligent geeks spent countless hours creating and improving Linux and Red Hat, and now a bunch of doughy, pasty-faced vultures at "Goodkind Labaton Rudoff & Sucharow LLP" will rake in an assload of cash from this?
Naw.
There are a number of sleazebag outfits like "Dewey, Sooem, and Howe" who file class action suits every time a stock takes a major dive, and advertise for some (possibly former) stockholder to sign on as lead plantif. (Expect several more before this is over.)
Usually what happens is they get before a judge and get pitched out on their ear. Occasionally the company screwed up, in which case they MIGHT get some judgement - of which Dewey et. al. split a big chunk and a bunch of stockholders maybe get pennies per share. It's like playing the lottery, for law firms with some small-change time on their hands.
They almost never get anywhere. But when a whale truly IS wounded the shark's chunk is SO big that every time there's blood in the water the sharks circulate in hopes of a feed.
Red Hat will no doubt slap these guys down in due course - at which point you will see a small note in the stock's news page. That's part of why corporations keep at least one attorney on staff. Partyl to make sure they stay squeaky-clean - partly to lead the coutner-attack when somebody says they're dirty.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Who could dispute such a clearly worded and concise argument :)
Ermm... actually - this particular auditor suggested changes that the previous auditor did not.
Zero effect to their financial position. Its nothing to do with Redhat's financial practices at all.
Yes, you're just being a troll, but come on now, at least try a little harder...
smash.
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
When you sue a company, you are effectively sueing the people who own that company. While the stockholders are not directly liable, any money you get comes directly from their dividend. So, if you still own stock, you are filing a lawsuit against yourself. If you sold your stock, you are sueing the poor fools you sold the stock to for acts committed by the company when you owned it.
I'm all for holding companies accountable for their actions, but I fail to see how lawsuits like this do anything other than benefit prior stockholders at the expense of the current ones.
If you have yum. I swear to god... I did a fresh install, pointed yum at the appropriate mirror, and did a dist-upgrade. The only thing it didn't fix was the /etc/redhat-release still being used in the /etc/issue* banners.
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
They still haven't figured out how much money they made in the past 3 years!
Seriously!
My rights don't need management.
that the stock price dropped not because of the SEC filing, but primarily because of the lawsuit brought against them AFTERWARDS.
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
I hate to be a metoo type poster but if i had any mod point i would place them all over your post. Some how you managed to take everything i was thinking about stuff like this and put it in a few paragraphs that not only says it corectly but says it in a way not to confuse the issue.
Good job pointing out the way it is and the problems with it.
I just don't get it. With fedora, I'm getting the same deal I was getting with the distro when it had redhat slapped on the label. I get a full OS, the price is right, in my case a few bucks plus shipping, and free security and enhancement updates. When I am stuck on something I go look on google. When I had a boxed set with RH on the label, it cost me 60 clams, and I got free security and enhancement updates. The only difference is I got some redhat stickers and a dead trees version of the manual. When I got stuck on something back then I went and looked on google. I have a better distro with more stuff than two years ago, and it costs me less, so I should be mad at redhat and..huh?
You make money from free software primarily by using that software in your other, *real* business, building/selling/servicing widgets.
Redhat got two versions,one sorta free kinda,and one really really free,and it actually costs them to provide it. One for businesses who are theoretically making enough money using computers somehow to be able to pay a fee for the "pro-commercial" version, and another one for hobbiests and enthusiasts who agree to help out and help develop and look for bugs, etc. Seems reasonable to me.
I don't see what the big negative deal is really. Either version works, the pro version has a different and more tweaked server and some other doo-dads obviously, but you get more support. The really free version has everything you need as well, just somewhat different, I mean apache is apache and whatnot. The money has to come from someplace. I think they made the right move, to both stay in business and keep getting better, and to offer the most to the most people for the most purposes (and most budgets to boot). It's not perfect, but what is?
I'm not disagreeing with you there either.
...that they changed the rules:
;-)
1) something
2) something
3) profit^H^H^H^H^H^H^H^H^H^H
sorry - SOMEONE had to make that joke!
My company had class action problems when earnings fell way below estimates for a quarter... right after the dot com bubble burst. There wasn't really much we could do about it as we got caught dreaming of unrealistic expectations just like so many other technology companies. All the "ambulance chasers" appeared out of the woodwork claiming our CFO and CEO misled investors, yada, yada, yada... Eventually, our company recovered and all the class action lawsuits mysteriously vanished.
Are such seemingly frivolous class action suits at the first sign of blood a good or bad thing? I prefer to look at it from a higher plain... These lawsuits are an important part of the Capitalist "food chain". Though on an emotional level, we may be rooting for our beloved Red Hat, it's important for the vultures to be flying around in circles over head at the first sign of weakness. Nature does it for a reason: the fittest must survive and the weak must become a quick meal for successful predators. Unfortunately, sometimes cute little furry bunny rabbits get eaten up. Such is the nature of the game.
The posturing and lawsuits are all part of an elaborate check and balance system that keeps CFOs honest and our economy running efficiently.
I'm not sure why they're sueing Red Hat since the plaintiffs are the stock holders of Red Hat and the defendant is Red Hat which is owned by the stock holders. The only one who's going to profit from this are the lawyers.
EvilCON - Made Famous by
AFAIK, Slashdot is anti-RedHat for the most part, because they felt "betrayed" by Fedora.
/. is just taking the POV of the articles they're linking too, which is often the case.
No,
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
By not misreporting their earnings in the first place.
In this great capitalistic government, I mean economy, when you go public with your company most of the big share holders want a constant money flow--and lots of it. Through some lawyers who are always in it for the money and you have a volatile situation. If the flow stops the investors will find other ways to get the money.
This SIG pulled due to lack of funding. (This damn war is costing too much!)
How exactly is this suit supposed to "help" the shareholders? Isn't the company OWNED by the shareholders? The lawyers are essentially suing the shareholders, then, right? Sounds like the lawyers are just looking to fatten their wallets.
Cool beans!
If all the lame anonymous cowards would stfu and leave for good, the quality of the threads would be greatly enhanced....
General Public Lawsuits. ;)
---
Mod me down, you fucking twits. Go ahead. I dare you.
(I read with sigs off.)
Oh well, thats the business world. If they are guilty of securities fraud they will fry, if they are innocent then they will be alright. Maybe everyone in the open source community should get together and help Red Hat during their time of need, after all they have done so much for us.
Actually there is no mistake, they are changing one accepted accounting practice for another. BFD. The greed head losers on wall street and some dipshit shyster lawyers are greedy. Nothing else going on here.
I don't use RedHat and I don't endorse it but this is a bullshit law suit. I used Mandrake and Debian. So I can't be blamed for being pro RedHat, I am not.
If you don't like what I write don't be a CS and mod it down. Refute it.
Yea I can't spell. So what is your point?
If RedHat loses, the court will probably make them do what MicroSoft had to do for some of their antitrust settlements:
Give out coupons for free software.
The latest Slashdot meme.
(TaPao, high commissioner;planet Vulcan): "Kirk, Dis battle is to de death....Bring on the Learpa...."
2. Wait for them to restate earnings and have their shares drop.
3. Get those employees to launch class action.
4.
5. Profit
So who's really behind this class action then??? Awfully convenient isn't it...
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
"class-action suits against a company for mickey-mouse bullshit is repulsive. If the company was actually doing something sleezily financially bad (eg enron) or dumping arsenic in the public water supply, then these class-action suits are deserved."
Contrary to popular belief, class actions are not just to get bad guys like Erin Brocovich.
One of the goals of the class action is in a way to punish mickey mouse bs. Class actions are designed in part to punish / deter cumulative small wrongdoing that amounts to a lot in the end. The courts recognize that nobody is going to sue to recover a 10 cent loss. They also recognize that there is a need for self-interested lawyers to do it on behalf of the many people that aren't going to bother. Otherwise, the wrongdoer doesn't get punished.
(I'm not saying this class action is valid or not OR that redhat is a wrongdoer, only that class actions are in a lot of ways about what may seem to be small change to many people).
This kind of thing has been pointed in the past but why not point it out again: I don't remember the anti-MS class action attorneys being labeled "am
This kind of biased editorializing that has been pointed in the past but why not point it out again: I don't remember the anti-MS California class action attorneys being labeled "ambulance chasers." What bothers me more though is just any old lawyer being called an ambulance chaser. Sharks, maybe. Ambulance-chasers, no. It reminds me of when people call liberals "terrorists" because they are anti-war. I don't care if you think they are bad because they are anti-war, but don't use some irrelevant word. Same thing goes here. Ambulance chasers are laywers that solicit clients soon after personal injury. Anyway, it doesn't look like the class has been certified. It could be this case goes nowhere and it doesn't even cost RH that much (relatively). (Don't mod me troll because I mentioned lawyers, liberals, and M$ in the same post :P)
Redhat continues the astroturf campaign!
You know, im not slamming you for being ignorant, thats ok. But then you shouldn't spout your opinion like someone that actually knows what they are talking about. It just makes you look foolish.
----- Question authority, but not ours. Hate the man, but we're not him.
The fact that their sales are X doesn't mean that they'll ever get better. The company could continue to be mismanaged. In which case, investors are fucked. Look at apple before jobs. They were losing 800 million a quarter, with plenty of sales.
autopr0n is like, down and stuff.
I think if you invest in a company, you should that company [??? sic] and have to bide by it's decisions. If those decisions make the stock go down (as long as it's ethical) than tough shit.
No. As a shareholder you own part of the company. The directors are on your payroll and should obey you, not the other way round. (After all, it's your money on the line). The problem alledged by the suit is that the CEOs released insufficient information. How are you as a shareholder going to control the company, if you can't know what's going on?
Any sufficiently advanced libertarian utopia is indistinguishable from government.
Yup, as a proud holder of Acclaim (AKLM) stock when it fell from $25 to $12 I thought I was in for a bargain. Of course now it has fallen to 25 cents :-(
You know, that'd be a great name for a rock and roll band.
Nice slur.
/. care if RedHat sold groceries, not Linux?
/. so populated by ideological weenies that it expects people to forego their own bests interests for the sake of a corporation that just happens to sell Linux?
Would
Why shouldn't people sue if they believe RedHat dealt with them illegally? Misstating earnings -- deliberately or through error -- damages their investors.
Or, is
-- Slashdot: When Public Access TV Says "No"
I think if you go, for example, to finance.yahoo.com and poke around, you'll find that pretty much any time a publicly traded company restates earnings, class-action suits follow. They usually also fade away without much fanfare.
If you restate earnings, it automaticly triggers a 10K review by the SEC. Just SOP for the regulators.
I recommend reading most anything on his home page. You won't agree with all of it, but he gets you to think, and you have to admire his spirit.
Anyone can sue anyone else at any time
*ahem*
You accidentally left off "... in the USA."
Some countries are a little more reasonable with their litigation laws.
Like woodworking? Build your own picture frames.
...giving some of Redhat's money to that sleaseball lawyer.
Not exactly. how these suits work, is the sleaseball lawyer comes up with his target, and his scheme, and initiates the lawsuit. People then join the lawsuit, saying "Yes, I was 'harmed' also" (witness the CD settlement of late). If only two people would sign up, those two split the total that's left over after the lawyer gets his cut.
Of course, the lawyers take their cut first. The settlement amount is fixed, though, and independant of the number of people joining the lawsuit. So, if it goes anywhere, Redhat will already have lost that bucket of money, the lawyer gets his cut regardless, and the number of people in the lawsuit would only change how much each person gets. Since it's spent money already (if it goes), might as well take a dip into the pool & send it right back in.
When Red Hat goes tits up and get bought out lock, stock, barrel and intellectual property portfolio, and their new owner (SUN aka Microsoft) start leveraging those sweet Red Hat "defensive" patents against .com and .edus, don't - I repeat - do not start pissing and whining that you never saw it coming.
Red Hat is a commercial entity. When - not if - they go to the Dark Side, they are going to wreck Linux. Best case, they only poison the chalice for other commercial vendors. Worst case, they pull the full SCO and start going after end users.
You were warned, oh ye of boundless faith.
If you were blocking sigs, you wouldn't have to read this.
Hmmm, how would
Is Capitalism Good for the Poor?
If you were the accountant, and you found an unreported 200 million, what would you do with it?
My beliefs do not require that you agree with them.
-L
Don't Panic.
Sounds like a feeding frenzy. The lawyers will eat RH for lunch.
They really wont care if they destroy the company as long as they make a quick buck.
The lawyers are 1/3 of the problem we have in society today..
---- Booth was a patriot ----
So did the "Ambulance Chasers" send Taco a threatening letter about ajs calling them names?
--
"Outlook not so good." That magic 8-ball knows everything! I'll ask about Exchange Server next.
It is pretty sad that some greedy lawyers are looking to cash in on this small change in accounting. Coincidentally, I do not believe that either method of accounting for this revenue is incorrect and certainly not illegal. No wonder so many companies continue to maintain bad accounting practices, changing them for the better will get them sued.
IANAFA (I am not a financial advisor) and this should not be considered advise.
If you're buying stock in order to sell it to someone else at a higher price, you're going on the Greater Fool Theory (GFT). That's like trading baseball cards and is not IMHO a long term way to invest. Some people consider dividends the proper way to make money in stocks - you continually get benefit from your initial investment without having to sell it. The maximum rate of return you can hope to get through dividends is inversly proportional to the Price/Earning ratio (P/E). So it matters a LOT to some people. The PE does not indicate return, only possible return. It's still up to the company to offer a dividend.
That is funny, the actual amounts anything has changed is like fractions of a percent. Redhat would have to have some pretty shoddy lawyers to lose this suit.
Why shouldn't people sue if they believe RedHat dealt with them illegally? Misstating earnings -- deliberately or through error -- damages their investors.
Except in this case, it's just a matter of a change in when they're counting income from subscriptions. If you look at the restatement chart, nothing changes more than a couple cents here and there. In short, the change is a non-issue. The law firm is just being opportunistic and trying to make themselves some cash.
Portable versions of Firefox, GIMP, LibreOffice, etc
Here is what I sent to them, for curiosities sake. If I get a reply, I will post it as well:
I would like more information regarding your action against Red Hat. As a share holder, I find it a bit confusing as to what prompted this action. The restatment makes little to no difference on their bottom line, as the did not misreport any erarnings. The restatment merely takes the number from one column and moves it to a different columns. The dip is stock price is due to the market's normal reacivity to announcements of this sort, from any company whatsoever.
As a shareholder, and as someone who is qualified as part of this class, I find it odd, and a bit disconcerting at the speed at which this was filed. I dare say that no one actually came to you asking for a mass tort suit, but here it comes anyway. Sadly, your firm seems to me to be nothing more than opportunistic lawyers intent on making a large fee from the settlement of class action suits.
Of course, I could be wrong, and I always stand waiting to change my opinions of people and situations, should an incontrovertable arguement be presented to me.
Therefore, my challenge to you, is to convince me otherwise. I have read the documents you have provided regarding this case, but have yet to be convinced that I should join this venture. As I see it so far, the only people who really benefit from litigation of this nature are the lawyers themselves, with the many plaintiffs recieveing a paltry share of the settlement.
So please, enlighten me. Convince me. Change my mind. That is my challenge to you. Are you up to it?
"Our funds have never taken part in toxic or death spiral convertible financings of any sort" -BayStar's managing partne
as I posted here:
A good deal of the administration's actions are related to compromise to push through essential strategies for the war.
The war resolution, the money to support it, measures like the PATRIOT act, etc., all required compromised for other agendas.
Also, with measures like the perscription drug benefit, there was a tiny point of medical savings accounts. Go here to learn why MSA are the best choice.
With NCLB, there was supposed to be a voucher scheme introduced, which was later taken out. Now that a majority of minorities are in favor of vouchers, I don't understand why they aren't being adopted more rapidly.
That said, I am optimistic that Bush will do better in his second term, where he doesn't have much to lose. Given that Cheney won't be on the ticket in 2008, he can take measures which are normally anathema, such as social security reform, complete welfare reform (if that is even possible), and the measures removed from the health and education bills.
Given Kerry would be worse, without a doubt (even with the lies he is telling to paint himself as a centrist), I see no reason to reject this optimism.
Either way, I agree with the comment above: Bush understands the war, Kerry doesn't. Go here to hear more about that point.
[note this comment was made on a libertarian website. If you want the jackboot of a Kerry welfare/technocratic state crushing your dreams, then he might not be worse for you]
Robo-Blogs of the world: UNITE!
Could you edify us with what you think the "pervasive abuses" are?
emt 377 emt 4
Actually Republicans balancing the budget and being good for deficit reduction is a misconception. Regan, GB1 and GWB all have enourmous increases in the deficit during their time in office. Clinton had a major reduction leading to surplus while Carter had some reduction in deficit.
So saying that because Clinton could balance a budget that makes him Republican is disingenous.
And I would really like to know which social programs Bush is boosting. Since he did decrease combat hazard pay for the military and veterans medical benefits among other things.
Yeah, I'm a fan..let me tell you
"Nimis exaltatus rex sedet in vertice - caveat ruinam!"
Even if a RedHat investor believed what you just said, why would that compel him not to sue if he believed he'd suffered a loss because he believes RedHat did something that is illegal, incompetent, or both.
It's more important to protect the right to seek redress by bringing suit than it is to give some slack to a popular company.
-- Slashdot: When Public Access TV Says "No"
If bush understands the war why aren't we doing more to stop North Korea, Iran and China all countries that have nukes or are working on getting them? China and NK threaten to nuke us and next to nothing gets done.
But damn it, we went after Iraq! The fact that doing so removed forces from the hunt from UBL ( you know, they guy behing 9/11) doesn't matter. And it did remove forces, mainly intel forces.
Our borders are not secure BUT bush understands the war.
Our country needs to spend more on the military (not on going ops more troops and equiptment) but we get a pill for old people plan that will cost 800 Billion to 1.1 Trillion. BUT bush understand the war.
Our country needs the DOJ to go ofter terrorists, but they have been using the PA to go after strip clubs and drug dealers even though we were told it would be only used to go at terrorists. BUT bush understands the war.
HINT, that pill plan for old people, parts of the farm bill and other programs ARE WELFARE. Just because he has a R by his name doesn't change the fact.
I don't want my kids, grand kids and great grand kids to have to pay debts that we ran up because we are too gready to cut spending. Check the budget and look how much NON DEFENSE spending has grown under bush and you will find that it has grown a lot more than DEF spending has.
"I patently reject your characterization of me as an "ambulance chaser.""
I'm sorry, I don't characterize you that way at all. However (and I'm dissapointed at Slashdot's editors for retroactively changing my submission without noting that it was no longer a direct quote (that's just bad journalism)), I was not refering to you. I'm refering to the bottom-feeding lawyers that started this suit. They are not your friends; they are not doing this because they knew anything about the situation before it became a press release; and they are most certainly not going to pause for a beat if it looks like the chance of winning this one is slim.
Take a look at the history of the cases that the firms involved had started. You'll find that most of them end fast. It's just a shotgun approach. I don't know who your particular lawyers are, but the general approach is this: you read the filings of all of the publically traded companies. Any time a company files a negative restatement you watch the stock price that day and/or the next day. If it results in a substantial drop in price, you take a standard form-suit and write in the names and cursory facts.
The goal of such a suit is to get into discovery and find that there's some kernel of wrong-doing. You don't KNOW that there is, but when you start with all of the companies that had to re-state earnings your chances are fair that one in ten or so will yield something juicy enough to merit settlement, and that's going to net enough money to pay for your lawyers (of course, it's rarely enough to benefit the people like you who are actually concerned about the case).
"If you want to report both sides, fine, but I resent the one-sidedness of your submission."
I think you're looking at this from a "I lost money because RHAT's price went down," perspective, so I'm not so interested in "sides" as the objective facts. Fact: Red Hat re-stated revenues. Fact: Red Hat did so after their new auditors told them to. Fact: Red Hat's old auditors signed off on the books using the old method of reporting for three years. Fact: this kind of change as a result of different auditors is rare, but certainly not unheard of. Fact: the change did not result in different revenues for RHAT, only the months in which they were reported. Fact: As a result, Red Hat is down to twice the price that they were at last year.... that's right, they're up 100% over last year, after their price dropped. Fact: At their 52-week high, RHAT's price was around 300x their earnings, a valuation that was only appropriate in the context of speculation, FAR outside of RHAT's projections and guidance. Fact: Analysts were cautioning investors just before the pre-earnings drop that Red Hat was "priced for perfection", and that any mis-step in their implementation would result in failure to achive the lofty goals that were calculated into their price by the market.
It seems to me that, unless the discovery yields some as-yet-uncovered facts that hurt RHAT, your case simply doesn't stand a chance, and will end up costing you time while being nothing more than an "acceptable" loss to the ambulance chasers.
Of course they decided to restructure their product line. Revenue from the retail products didn't make a dent in their operating costs, whereas enterprise sales have quadrupled in 4 years.
Have you ever heard of the 80/20 rule? 20% of the products make up 80% of the profits? It varies a little but it generally recognized that you have a few or no loss leaders, a few highly profitable products, while the most volume is not really bringing in much - it is simply there.
Various business leaders over the years have looked at that and said "We should just cut those, they don't bring in any profits" only to fail to realize what that volume meant for economics of scale, brand name, crowd catcher and entry points for profitable sales.
RHL was that kind of product. Perhaps Red Hat is one of the few exceptions to this rule, but I doubt it. Remember that there are many servers out there that do not need enterprise support - yet. Perhaps RHL support would have been sufficient, and as their needs grow, more critical services transfer to Linux they would move to RHEL.
On the short-term, it will not hurt their enterprise sales. Those who needed it yesterday, still do. But in a longer perspective, I would be very concerned about Red Hat's economical future. Perhaps they can live off Windows converts, having a strong name. But they've certainly left a void others are more than happy to fill...
Kjella
Live today, because you never know what tomorrow brings
Man, that was fast!
now we know how ralph nader and jon edwards amde their millions.
The war with islam is a war on the beast
The war on terror is a war for peace
The title of this article was "Red Hat vs. The Ambulance Chasers" yesterday, now it is "Red Hat vs. The Lawyers". Since when did /. start worrying about being politically correct. Many of these comments are about the title containing Ambulance Chasers, now they seem irrelevant.
"Anything is possible with enough programmers, time and pizza." (Substitute caffeine for time as needed.)
Alas, any first year accounting student would never have let RedHat perform the deception that it did by recognizing revenue all at once for a service to be delivered over time. It is a fundamental principle of accounting, demanded by the FASB, and accepted by any gorilla who practices accounting. That said, I am not an accountant. I have taken only one semester of accounting plus done a little independent study.
It is understandable why RedHat's CFO got sacked. Frankly, I'm not sure why he's not under indictment for fraud. Worse, were it mine to do, I'd charge the entire board of directors and officers for fraud.
That it was not a lot of money, that it only spreads the revenue recognition across some several months is the whole, the entirety, of the principle of accrual accounting. Any business must do it under similar circumstances.
I applaud their accountants [who was that again?] for insisting on the restatement.
I have used RedHat's products in the past. I might use Fedora one of these days. I think they do a good thing. They absolutely, positively have to tighten up their accounting, or they will almost certainly go bust.
Not linearly. Most of what RedHat sells as a "service" is just access to an online automatic updates site. It isn't like RedHat is billing by the hour. RedHat Enterprise Linux is still released under the GPL, you just can't get the binary updates packages without paying to access the "RedHat Updates" internet server. You can still access the source code packages on public FTP sites. What people are paying for is the phone support and the access to the system software management system (and some other things that aren't that big of a deal yet).
So as the number of "subscribers" increases their bandwidth costs increase (not linearly either because many customers with multiple systems go through a caching proxy server), their customer support calls increase (but not linearly either because corporate customers don't call 10 times for one problem that affects 10 subscribed servers). Also, RedHat's central expense is the corporate sales, marketing, R&D and engineering/IT staff, and that is already paid for (at least until they get MUCH MUCH bigger). So they will be able to pile on the gravy (profit margin) as they grow. So far they have been reinvesting a large portion of their profits, I know that they have opened many branch offices (one right down the street from me) for their sales/consultants/training staff. So their operating margin is probably much larger than it looks at first glance.
entirely off topic, and this is not a troll. It's a legitimate question.
What's wrong or 'unhealthy' with high-fructose corn syrup? I hadn't heard anything bad about it. Am I missing something? Educate me!
. . .then its a little in favor of Bush because he does have expirence, even if it isn't very good expirence. Being President through 9/11 has to count for something.
No, it doesn't count "if it isn't very good EXPERIENCE". Would you want me to rebuild your car engine if I told you that I failed auto shop? At least I took auto shop, and that has to count for something.
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President of the Internet.
fuck you.
One of the first web sites I ever designed was for a law firm that specializes in exactly this type of class-action lawsuit. The rush to court reflects the dynamics of what has become (in the US) a very competitive legal business.
The name of the game in class action suits is to be named the "lead" attorneys by the court in which the suit is heard. Courts decide who gets to be the lead based on the number of plaintiff shares each law firm can bring to the table. Typically the one or two firms representing the largest number of plaintiff shares are designated, and they receive the lion's share of the fees (if any). This has created an enormously competitive environment among trial attorneys as each firm tries to recruit as many plaintiffs as possible. Being first to file the suit can help this recruitment effort, since later filers can appear to potential plaintiffs as less competent or engaging in a "me-too" practice. In such an environment it's become commonplace to announce a suit within days or even hours of a company's earnings restatement.
Finally, before we continue down the "ambulance chaser" road, it's important to remember that a lot of companies engage in shady financial practices and deserve to be sued. My then-client was suing a number of firms where corporate officers dumped their stock just before announcing a major earnings restatement. And, of course, today's the day Martha Stewart will be sentenced....
Opportunistic lawyers just going for bucks from the company, hoping for a settlement or that they can turn up something negative. If we required the Lawyers to pay a company's legal damages when no merit to their case is found, there would be a lot fewer of these.
Anyway these are so common, most companies have legal contingencies built into their expense budgets. A shame. But Red Hat will most likely come out smelling like a rose. Actually created a good buying opportunity for anyone interested in their stock, IMHO.
hey as of the 8th the seo challenge has been over, maybe it's time to think of a new url for /. ;) give me more pretty widgets to click when i'm bored ^^;;
then again, i've had the same booring url for years now, but It's important for the true values of freedom that this nation was founded on to be understood, especially when none of those values are being upheld by our current elected officials...
https://www.gnu.org/philosophy/free-sw.html
Perhaps the lawyers are suing not because of the change, but the effects of the change (the share price went down)
So fucking killfile him and STFU.
He didn't read it, it was read to him.
Karma, We don't need no stinkin' karma!