Tim O'Reilly on the Open Source IPOs

jbc writes "In the latest Ask Tim piece at the O'Reilly Web site, Tim O'Reilly gives his views on the likely impact of big money on the Open Source movement. Among other points, he says Red Hat's pre-IPO invitation is a good start, but doesn't do enough to promote future Open Source development. " At this point, I just wanna see how the market responds to RHAT.

Comments

Re:A move for hackers to be shareholders

[JoeBuck]

Please note: I am not a lawyer.

If the action is really "utterly indefensible", then yes, there are grounds for a lawsuit: the stockholders with a 51% interest can't just decide to take all the money away from the folks with 49%, or run the company into the ground because there's a majority stockholder who's nuts. But according to some scholars (see below), such suits are almost impossible to win unless conflict of interest or improper motivation can be shown.

Anyway, choosing an open source model is defensible as a business practice, as ESR is fond of pointing out. And besides, while in theory I suppose some stockholder could try to sue Red Hat for not dumping the Open Source model, I don't think that suit would win.

If anyone wants to plow through a lot of legal stuff on the subject, try this article.

Re:A move for hackers to be shareholders

[sethg]

As pointed out in the article, the company has a responsibility to the shareholders. If those shareholders are hackers, then the responsibility is not only to make money, but mainly to provide a good open source solution and comply to standards.

Question for the legal beagles: Let's say a publically owned company does something that is utterly indefensible from a profit-making point of view, but pleases the people who own 51% of its stock. (E.g., the company gives away most of its assets to a cult that the majority shareholders belong to.) Do the unhappy 49% have grounds for a shareholder lawsuit?

If the answer is "yes", then hacker shareholders won't be able to put openness ahead of money in RHAT's list of priorities.