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Red Hat IPO Surprise
An anonymous told us that they recieved a little
surprise in their inbox from Red Hat today: The NC boys
have reserved a chunk of shares to be purchased on E*Trade by
contributors to the open source comunity before the
masses get their chance to super inflate them. Very cool
on RHs part (even tho I didn't seem to make the cut *sniffle* :)
This is not different from the sort of offer many corporations give their board of directors, except the directors have a chance to purchase larger amounts.
This is not costing Red Hat much to do - they are selling you the stock at the same price they'd be selling it to the institutions who generally get in to IPOs. However, they are taking a public-relations risk, and that takes guts.
The only problem here is that you need money to get in the game. Some of the people who were chosen won't be able to play because of that.
Red Hat employees and a few special people are most likely being given "options", which means they can purchase the stock at a fixed price (which can range from pennies per share to the initial offering price) for a number of years. I've been there with Pixar. Options are a much better deal because you don't have to buy until you know you'll make a profit, but it costs RH much more to offer options because the artificially low price of the options dilutes the market value of their stock.
Thanks
Bruce Perens
Bruce Perens.
I am a Debian developer. I posted the RedHat mail. That action had nothing to do with the way Debian as a whole feels or believes. I am an individual and I posted the mail on my own, and not on the behalf of Debian.
I do think many of us do feel violated by a company that we thought held the same values as us. But they do this and make themselves no better than cyber-promo (you gotta remember these dorks). Spam is spam, no matter how you look at it. We did not ask for it. Many of us got hit on our @debian.org addresses, not our own home addy. I PERSONALLY think RedHat is demonstrating it's MS'ishness. Again, these comments are MINE, not Debian. I'm just to lazy to make my own l/p.
Thanks,
Erick Kinnee
ekinnee1@airmail.net
Yes, spam is any unsolicited mass commercial emailing. This fits that definition. Whether you happen to see it as a positive spam does not make any difference to the hundreds of people who received it and did not wish to receive it. To them it's just another piece of spam, and you'll see that at least some of them are not very happy about it if you read the rest of the comments here.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
A few days ago everyone was being real paranoid about how Redhat would now have to answer to its stockholders. "What if Microsoft buys a stake?!" came the bellows. So what does Redhat do? They dump a ton of shares back into the Linux/OSS community. Everyone has focused on how this is free money if you sell out early, but it also gives you partial control of Redhat if you stay. So now Microsoft might own a piece, but so will Debian. And we all know the kind of amoral money-grubbers Debian attracts...
But this is wrong too? So y'all don't want he money coming from outside, because that biases RHAT away from the community, but it can't from inside either, because that biases the community towards RHAT. So where can the money come from? Is there anything Red Hat can do that isn't sinister and underhanded?
How is this any different? If you really think you have a good chance of making tons of easy money through Red Hat's IPO, you need to learn more about the stock market.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
If we used those rules, then everybody could justify their spam as being ok. "Sure, it's spam, but I'm giving him a REALLY good deal on this porn site subscription." "Sure, it's spam, but if he puts our ad banners on his site he could make a ton of easy money." I don't see how Red Hat's spam is any different. Some of the people who receive it may like it, and may make money from it. The same goes for some of the people who receive spam from a banner ad company. Both are spam, and both display poor judgement on the part of the spamming company.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
I think that this is called "directed shares" and E*Trade has a mailbox and a phone number set up specifically for this ("directed shares" in general, not Red Hat specifically.)
:)
Now, I don't know if directed shares are a different pool set aside for "friends and family" or if it just means "hey, we targeted you with an email and we hope you buy some." In other words, I don't know if people who got this offer have any better chance of participating in the IPO.
I seriously doubt that this is an SEC violation - surely E*Trade and Red Hat's lawyers would have stopped it otherwise.
YMMV, IANAI (I am not an investor)... Well, not much of one anyway.
Yeah, I'd hate to get mail like that.
Anyone with an E*Trade account (for example) has a shot at "getting in before the masses." E*Trade has an IPO center, and you can try to get in on any IPO (It's basically a lottery for the popular IPOs). I'm wondering if the people who were extended this offer from Red Hat have a *better* chance at it than the general public, or if they're in the same boat as everyone else.
I believe they got at least some of them from bugzilla on developer.redhat.com.
I'm not entirely sure, mind you, but the only place I can think of where I've been an open source contributer is bug 3701 there. (not that I don't want to be, mind you, I've just never coded anything useful)
For all of you that think this is spam think again this is a GREAT offer. Why is this great? Well simply put this is an offer to get in on the ground floor price before it shoots through the ceiling. By the end of the day the price will more then likely be triple or more the initial price and that is quite a return on an investment. If you sell at the end of the day it's quite profitable.
Admittedly some do not have the $$ to open an E*Trade account and partake but those who can it is an excellent offer. All I can say is that Red Hat did have a good idea here since it is an excellent offer (whether you like the company or not) to make some $$ quite easily and with virtually no risk. No one says you *HAVE* to hang on to the shares at the end of the day (or week) they'll be worth quite a bit more and make you a nice profit.
I only wish that I'd received an email about this however a lot of my work is not high profile or where they would have heard of me. For the developers overseas all I can surmise is that RedHat did it in this way by email to limit the number of offers to just those developing and not to where the average person could get the info and take advantage of it. Why all the Debian developers? Simple they probably needed a quick and easy way to get the info out or it would be useless to waste a lot of people's time just looking for people that would be interested.
This is in a way them saying thank you to the developers by letting them make some $$ off of their IPO whether they like the company or not.
Personally, I think this is a great reward. First, it's not spam--If you were sent a username and password for an online trading account worth a million bucks unsolicited in the e-mail (with a reason and your name attached) would you turn it down? No. You would be jealous of the guy next to you if he got that account though. It's also very much in the "directed shares" category. Who made huge chunks of the product they sell, the community, so who are they trying to reward? The community. They can't get everybody (so don't bitch if you didn't get e-mailed) but they seem to have tried to hit a bunch. I've sent in patches to various packages I've worked with, and I'm not pissed that I didn't get e-mailed, but who cares, it's the thought that counts. In addition, stuff like this usually amounts to 100 shares a person, and if you have to open an account at etrade at $2000 and it opens at 20, then you just spend all the $ anyway, so don't bitch about the $$.
--
--
Think Green... Burn only 100% recycled dinosaurs in you car.
Let's face it, E-trade is one of the few ways Joe Bloes like us are going to get our hands on IPO stock. The big boys on Wall Street pick up most of it, and it's damn hard to get any when you only want to buy a hundred shares. I don't think you are justified in denouncing it as spam. Delete the email. Rant a bit. Sleep on it.
Also, how is Red Hat to know whether you are a non-US citizen? I use a NetForward address to (very primitively) protect my privacy, and there's no quick way to tell where the email ends up (as it turns out, I'm Canadian. Boo hoo, no IPO for me). Admittedly, they could simply not send email to anyone whos email address ends in a foreign country's suffix, but you might just be an American student working abroad.
I support their decision to offer IPO stock to everyone associated with the Open Source community. It's very generous of them.
Wah!
Quit your bitching!!!! I can't believe you're calling redhat spammers... Sure they sent out emails to many people, but they are doing these people a favor. They are not getting any personal gain out of it.
Here's what happens:
1. Red Hat emails a bunch of developers to tell them about their IPO and how they can get in early.
2. Developer chooses to open an etrade account (initial $1000 DEPOSIT, not a fee, you can get your money back by closing the account)
3. Red Hat's IPO happens. The price will (probably 99.9% chance) shoot up way above the initial offering, and then eventually drop off a little (or possibly alot).
4. Developer sells off stock at much higher price than he bought it for and makes lots of money, or chooses to hold on to it expecting it to climb higher sometime in the future.
Hmmm, who wins at this???? Well, the developer makes some money (looks like a good way for RedHat to give a little extra thanks back to the Open Source community), and etrade gets 29.90 for executing the trades for you (BFD, you just made a bunch of cash). Red Hat doesn't really gain anything out of it except maybe a short-lived bias towards their distribution.
Red Hat doesn't necessarily make the best distribution, but they definitely don't make the worst. They've had to put up with a lot of shit over the last few months because many people in the Linux community seem to adopt the idea that making money is evil and Red Hat is turning into Microsoft. Just because they try to turn a buck doesn't make them evil. Suse made more money last quarter than RedHat and they don't seem be criticized as much. Quit your complaining about this and take it for what it is... a simple thank you from Red Hat to the developers of open source software.
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Oh, thanks. I had no idea there were different kinds of underwriting.
So which one of Microsoft's PR firms do you
think posted this insightful message?
With Etrade, you need to open an account (which it sounds like you already did). Their docs on IPOs are really vague. So, a few days ago, I emailed the support dept and asked how to get in. ETrade takes "indications of interest" where you need to fill out a form that asks some basic investment type questions (what is your short/long term goals?, etc.). Based on your answers you may or may not be admitted to the IPO. Etrade wants the IPO to match your investment goals.
The strange part about this is that they only accept indications of interest for 2 hours. This usually happens after the close of the market (4:30 EST), but they will never tell you what day and you need enough cash in your account to cover the purchase.
If you go to the IPO section and find an IPO that has a "Go Now!" link, it is open and you can fill out one of their "indication of interest" forms.
I had a feeling that the RH IPO would be available today. I've been trying to log on to Etrade all afternoon, but their system is screwed up again and I have not been able to access anything.
I disagree.
I get a lot of unsolicited mail - by friends who have found me via one route or another, by people who will have read something I've posted, even some targetted promotional offers.
That's the important part - *targetted.*
People who were targetted based on their participation in developing the kernel or other open source projects, who leave their email addresses available in the context of those projects, are open to mails targetted to people involved in those projects. Whether it's an IPO offer like RedHat's, or a note from a contented user saying "thanks for your work," or a bug report.
Spam is more than merely unsolicited mail with more than one person in the To: header - it's unsolicited mail that isn't targetted, that transmits mail completely unrelated to the source of the address, for direct-marketing purposes.
Content can define SPAM, because content betrays intention.
I've seen many postings on both sides of an apperent debate. Some people claim that this is some kind of underhanded move by the people at etrade. Others would sugest that this shows how RedHat cares about its customers. One person likened it to RedHat throwing money in our faces. I say to all of you, "Calm It!"
Now, a few things. First the way IPO's work is like this. The portion of the company to be sold publicly is given to one main (in this case two) brokers. They in turn sell the stock at a price determined jointly by the broker, the company, and to some extend SEC rules. The borkers sell a portion to "friends and family" of the company having the IPO, a portion to the brokers customers, and a large part to other brokers. The other brokers sell some to their customers and put some into mutual funds etc. It is the small portion that goes to the brokers customers that apears to be in dispute.
It is not uncommon for this to be mostly sold to the winners of a lottery; however, some of this stock can be given to people in the industry. In the case of RedHat there just hapens to be a lot of people in the industry.
Yes, ETrade can require you to have an acount (they sell it to their customers remember). This creates competion and is why everyone wants to sponsor IPOs.
The point is that they're not offering him any sort of reward, since he can't get in on the IPO anyway. They're just cluttering up his mailbox with useless spam.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
If no one buys the stock, Goldman Sachs has to buy it. They get the $96m either way.
I continue to be impressed with the degree to which people feel compelled to complain about Red Hat. Yes, they're making money off the IPO (I mean really, that's what IPO's do). No, they are not especially making money off providing developers allocations of their stock. If they didn't use those allocations, institutions and random investors would eat them up and they would make exactly the same amount of money. The entire IPO is going to be sold.
Did it make sense to offer various people in the community free shares? Probably, since they sell open source software and those people are involved with development. Did they do a perfect job of selecting all the developers they should have? Probably not. I doubt they had time to develop dossiers on everyone they wanted to send an email to. Was it spam? Only in the sense that someone who sent a voucher for $1,000 to 1,000 people would be sending out spam. It's found money, people. If you can open an account with eTrade and want to, do it; otherwise, dismiss the whole thing out of hand. Either way, there's no call to be angry.
Did I get the offer? No. Am I paid in any way by Red Hat? No. But it doesn't seem especially reasonable to yell at them for trying to spread the wealth a bit. Their privilege to offer, yours to decline.
Rob Levin
Just because a spammed offer is, in your opinion, generous, does not make it not spam to the hundreds of people who received it unwillingly. It is still unsolicited commercial email.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
From the mouth of anonymous cowards... :)
:)
Anyway, it's pretty certain that Redhat got the email addresses they're sending this to from their bugzilla, as that's the permutation of my e-mail address the e-mail I got from them on this subject was addressed to.
At any rate, whether it's "spam" or not depends on what the sign-up form for bugzilla said with regards to what they'll do with your address. They at least haven't been mining newsgroups for addresses, it seems.
-- Rick
Red Hat Software is offering this to those people that wrote code which is something that represents a contribution to the body of software that makes up the product that they sell.
That represents value returned for value contributed.
If your only "participation" is in having bought a box from them, then you received your reward in the form of that box.
If your only "participation" is in reading Slashdot, then I see no connection, no value, and no reason for them to give you anything.
If you're not part of the solution, you're part of the precipitate.
Certainly some interesting responses to all of this. Personally, I think that this was a very nice gesture on the part of RedHat. But can you image what would have happened if CmdrTaco had decided to go public with a /. IPO instead of selling to Andover?
/. user accounts first dibs at the IPO; unfortunately, he announces this by a mass e-mailing. This triggers a Jon Katz story about /. spam, which results in a heated /. discussion about /. spam, which results in a Jon Katz story about the discussion about /. spam.
/. effect. In Rob's filing with the SEC after the IPO, he sheepishly has to report that the largest shareholder is someone named Anonymous Coward.
/. poll: I own 1) 0-10 shares, 2) 10-100, 3) 300-1000, 4) 954+, 5) JarJar sucks. Unfortunately, someone inadvertently comments about the right to own stock. You know where this eventually leads to.
Rob generously offers
eTrade goes down under the immense
This is followed by
Moderation points are partly determined by the number of shares you own. This proves disastrous as MEEPT posts start at a +5.
If it wasn't send to many people (or many copies to one person) then it is not spam.
If the people asked for it, it is not spam.
If it was send to many people who did not ask for it, it _is_ spam.
Content doesn't enter the equation.
The reason some novices think content matter, is because most spam have a very low quality content. So when thye hear "that is spam", they assume the word refers to the quality of the content, not to the fact that it was send to many people who did not ask for it.
See? Write screen savers, get in on IPOs. Who said screen savers were useless.
Too bad E*Trade is involved, though -- E*Trade SUCKS . Completely unusable site, and I've been trying to fucking close my account with them for months -- they just won't do it. There's no way to do it on the web site, if you email them they say you have to do it in writing, and when I ask them in writing, they keep sending my letters back to me. It seems that the only way they can keep customers is to make it impossible for anyone to cease being a customer.
I didn't even ask to be a customer in the first place, if you wanted to participate in Netscape's Employee Stock Purchase Program, you had to use E*Trade, there was no other option.
If I decided to email you about some investment opportunity, would you consider that spam too?
Content does not define what's spam.
According to you. Spam is unsolicited *advertising*, by my definition.
Where do you draw the line?
If it was sent to a list of people who did not solicit the mail, it is spam. No exceptions.
Geez, that's pretty tough. I just sent a mail to 10 people I know at university, and I didn't ask them first. And earlier today I sent a mail to a list (of 2) Slashdot posters, and I sure as hell didn't ask them first.
If I were to suck a list of Linux kernel developers and mail them all saying `here, have a free Quad PII Xeon box, to help with your development work', would that be spam? If I were to mail a list of MPs in the UK telling them that key escrow was stupid and shouldn't go ahead (perhaps put slightly more rationally, and with arguments), would that be spam? You really have to clean up your definition a little. IMVVHO.
People abuse the word spam.
They do indeed.
And they misdefine it, too.