Slashdot Mirror
Cobalt IPO Opens...High
GrenDel Fuego was the first to write with the news of Cobalt's rather succesful IPO. It's gone from 22$ opening shares to a now current of 146$ per share. You can check where it's currently at as well.
← Back to Stories (view on slashdot.org)
Not just Doonesbury, but also Sherman's Lagoon. It all starts with a statue curse on the Internet and the founder of Yahoo!.
Check it out: Archive of Sherman's Lagoon
It continues through at least today.
~afniv
"Man könnte froh sein, wenn die Luft so rein wäre wie das Bier"
~afniv
"Man könnte froh sein, wenn die Luft so rein wäre wie das Bier"
Richard von Weizs
I am not a stock analyst, but consider - did all of the company's shares go out on the open market? Or did a large percentage stay "inside the company", so to speak? If the latter, then it indicates that they have additional shares to sell later... albeit at a slightly lower price (due to dilution), but still at a considerably higher price than $22 (US) per share.
I'm sure they only sold off a small part of the company in the IPO. I'm guessing 5-10% or so is typical.
Sure, they can sell more stock for the higher price. But they could have done that even if the IPO price was $100, and it went up to $140, so that is no reason to have a low IPO price.
Of course, no one goes IPO at $100, so they should have made a five-way split and IPOd at $20. But that is just a technicality.
I'm not a stock analyst either, but I work in Silicon Valley, and I get to hear a lot of IPO talk.
Someone out there care to shed some light on these contradictions?
Excuse me! Hello! Get a clue...If you need technical support for a product that is as trivial to implement as the Cobalt microserver product line, I think you are the problem.
Your inability to set up a Cobalt microserver is a shining badge of your ignorance. Try reading the HOWTO's, they're a great resource.
The Cobalt microserver line is a masterpiece that hides the complexity of the Linux OS from lamers just like you. You should complement the technical support and engineering staff, all of whom have huge work loads, and are severely understaffed. Shame on you.
My nine year old daughter set up a Cobalt server in 60 minutes. No problems encountered. This includes NAT, IP forwarding, mailing lists, POP accounts, named-based virtual hosting, and DNS.
So what's your excuse?
Additionally, don't you find bashing overworked and understaffed technical support personel a little boring? Get a life.
BTW - I'm a Un*n network administrator with many years of experience and I can tell you that Cobalt microservers are quite impressive.
I know...I know.....and just to make it impossible instead of really bloody hard....I'm not a US citizen which rules me out of the IPO game :(
You are the first person I've, well, "met" who reads Sherman's Lagoon that neither I nor my friend Matt (who introduced me) introduced to the strip.
Another one I bookmark and read regularly is Liberty Meadows. Funny stuff.
Now back to your regularly scheduled Slashdot...
Jay (=
hey folks, since it's friday and i have plans, yet also a burning desire to share with folk what i know, i'll give you a rough sketch of the system: first you need to know the difference between underwriters, market makers (NASDAQ), and specialists(NYSE). let's say a bunch of geeks get together and code until they come up with a 'yummy' sort of commodity. now let's say they want to go on the NASDAQ and be publically traded. they will seek some venture capital and after a few million they are ready to go public (i'm skipping monthes/yrs of hard work here). here they need to seek some institution such as back of boston, deutch bank, or in case of cobalt it was Goldman Sacks. most people who have the original IPO are the geeks who did the original coding (the word used rather loosely here, so i just mean the popole who started cobalt). other folks with a lot of IPO allocation are the folks who did original venture capital inverstment on the compnay early on, along with the richest clients of the underwriter (poeple with millions in their account with goldman sacks). when the IPO opens in the market, people will keep asking higher and higher prices until someone with the original IPO sells. This may bring the prospectus price (written in the company prospectus and filed with SEC and available to the public online) of say $20 up to $200 until the first Shareholder decides to say, okay i'll sell my shares now. At this point a market maker will get hold of the shares and will try to hype it a few more bucks, say from 114 to 120. then sell at 120 (or whatever the inflated price is) and will buy it back again and $114. only to sell it again, at $117...ad infinitum...hence the capitalist marker 101 in a Nutshell. if people want to i can expand a bit later... tchau for now. bobbaq@yahoo
You probably won't read this, since it's late, but I'm resonding anyway.
My original post stated that I was unable to get in at that price, no matter what I did. So my starting point would have been 139. With RedHat I had almost a whole day to get it under 50.
Steven Rostedt
Steven Rostedt
-- Nevermind
Not only that... they own what, 25% of Rebel.com.
So much opportunity... and they can loose money, too!
But, unfortunately, the NetWinder doesn't have a cool cobalt box... and hasn't been developed much in the past two years. Sad... great concept, dead before its time.
(yes, i do own stock in 'em)
Actually The product they sell from what I have used is nothing but problems if you do not use thiere java admin crap. If you manualy add stuff it will brake the server and all things come to a end (including services).
You callin' me an ubergeek? :p
Well, if you're actually contributing code instead of cashing in on the IPOs - yeah, you're a real ubergeek.
That doesn't mean that ubergeeks don't get stock options or IPO shares for their contribs, just that it's not your focus - the code is.
Will in Seattle
what goes up... must come down.
--only if you're using microsloth products.
It did about what one would expect, given that few shares were offered in the IPO (most are still held) and it was considered to be one of the Red Hot IPOs for the month.
... for this stock, expect a good price about 30+ days from now, with a better price around 94 days and another chance in 180 days. Those are the periods when large blocks of shares are allowed to trade.
As to how long the market will take to deflate back to a reasonable level
Personally, I thought they priced it low so that other people would want to buy more Linux IPOs, given that the profit potential is so high. I'm not sure if I got any allocation through MSDW, and know I didn't through E*Trade, but I'm holding for a longer period anyway.
Next one is VA Linux Systems, formerly VA Research. I've got some IPO shares of UPS.com, which should also be Red Hot, so I'm not complaining, but I keep hoping I'll get more Linux IPOs, because I love making the PHB think Linux is the best thing since English Muffins (or was that Hot Buttered Penguins)?
Will in Seattle
Yo! Then we can either follow this stuff or be ignored by the real ubergeeks who actually crank out code most of the time.
Will in Seattle
1. Run over someone who got options with a truck, assume their identity, and cash in.
2. Work for a brokerage firm that takes the IPO public.
3. Marry someone who can give you Friends and Family IPO shares.
4. Be an exec at the firm that's IPO'd.
5. Contrib to code from the IPO firm.
6. Have more than $100K in an account at a major firm like Morgan Stanley Dean Witter and trade a bunch.
7. Be a famous actor, so you can get them to give you the Friends and Family.
All proven to work.
You can also try your luck with E*Trade ($50K+ account helps), Goldman Sachs, and a bunch of other firms that may have lesser requirements.
Will in Seattle
Well, I only have limited experiance, but here's what I've been able to figure out. It may not be completely accurate.
In order to get in on the IPO you need to know someone at the company, or at the financial firm handling the IPO basically.
The stock starts at the IPO price, and is made available to brokers first, then by the time it's made available to the public, it's already inflated (the first trade). The percent change of the day uses the IPO price since that's what it was technically worth before trading.
more fools, dumping there money into a virtual pit of hype. Sad thing is, only investers with signicant capital can even get in on these ipo's. While us common folk don't get any of the action, i.e. the rich get richer. But just like redhat, I would call this a pump and dump stock. In fact if I had money in cobaly right now I would dump it! It is a completely useless long term investment. Blade
I don't really get all this IPO madness enough to put down money (feels like playing roulette). I didn't say Cobalt is a good investment, just a better one than RedHat (but market hype makes all the difference, doesn't it?)
Maybe you should read Mackay's classic Extraordinary popular delusions and the madness of crowds
Volume 2
Volume 3
OK, so unless I completely misunderstand this whole stock market thing, in order for the value to have reached 146, somebody must have paid $146 for shares of Cobalt stock. But who's doing this? It's common knowledge that new tech stocks start off low, skyrocket to an absurd number, then fall back to reality over the next few months and start behaving rationally. So somebody who bought at 146 is going to have to wait years for it to go up to beyond that.
Are these daytraders, hoping to buy at 146 and sell 20 minutes later at 147? Or people who just don't get it? Or what?
My Web Page
Well, they don't just "sell ssh", they sell security, including something called IPsec.
Quite a bunch of my friends just turned a lot "richer" today; assumably as company workers they got their shares from top of stack. Free beer?-)
I think, therefore thoughts exist. Ego is just an impression.
It's easy to say, "I could've," but in reality, you couldn't. Not only that, WitCap requires you to hold the newly issued IPO for 60 days (or else you are a "flipper" and no more IPO's for you!) and who knows where the stock will be in 60 days.
Sporadic
Will the madness never end?
(I just gotta get myself in the stock market...)
--
Don't like it? Respond with words, not karma.
Why didn't I buy a gazillion of these stock before the IPO.....(and now to include a favorite topic on slashdot)
Imagine the beowulf cluster I could build with all the money I'd earn!
Cobalt plans to use the offering's proceeds for various purposes, including working capital, funding operating losses, capital expenditures and potential acquisitions of complementary businesses, products and technologies.
I wonder what/who they might be interested in?
They take a PC, put Linux on it, and offer it as a server, just valued added economics.
What a wild ride.
George
Do yourself a favor and don't try chasing this stock at these levels. You could easily end up as road kill. Sentiment in the market is decidedly bullish as compared to the sentiment at the time of the Red Hat IPO. Buy it on pullbacks if you think you must own it. Or buy Red Hat as an alternative if you must play the Linux theme. (Disclosure, I own Red Hat).
Slashdot should have a financial advise page, what stocks are rumored to IPO at a couple of bucks and then go up by 4 or 500% later that day ;)
Well Its amazing to see the business world recognize the TRUE value of an enterprise which bases its high technology products around a tried and true OS - Linux. I read an article about cobalt in Wired earlier this year, and they chose Linux as a proven product. It saved them 2 years of development time in getting their servers to the market and guess what? The business/investment community recognized the sheer brilliance of the guys there ;)
Kudos to you folks at Cobalt
Clive DaSilva Email: clive.dasilva@gmail.com Ubuntu 18.10 Kernel 4.18
These are important questions for anyone following this stuff...
--
... they have a good product and I would guess pretty solid margins. They are doing all the config and setup for dedicated web boxes. I have one doing, DHCP, NAT, DNS, firewall, webserving, e-mail, all with what amounts to a point and click interface (and a bit of hand tweaking). My box has been up for 5 months solid after one reboot (my bad) out of it's box.
I think the Home Web Server(tm) will become more common as families set up their own e-mail boxes, and a family web-page on a dedicated pipe. Since the same box can also serve to share a 'Net connection and act as a firewall it's quite a deal. Plus, and this is a big plus, they look dang cool, especially in the dark. (I'm talking about the Qube not the Raq)
Good product + looks cool + runs Linux = big IPO
+&x
If a hardware company that shows losses is worth SO much....
Why was IBM so low a few years ago?
Why did Apple drop to sub $15...it was loosing money too.
http://www.pelagius.com/AppleRecon/991001a.html
With quotes like:
The markets have been "living on borrowed time with borrowed money" ever since the first
Fed rate cut in the fall of '98.
the Fed will assiduously remain in "Full Blown Bubble Protection Mode."
And greed is not a "Bad thing" as long as it's kept in perspective. But the majority of the people are not
keeping it in perspective. That's the reason why so many are willing to push a lot of stocks way out of whack; the most
telling are the Internet stocks.
It may be a New Market, but markets cycle, and the higher the upside, the lower the downside.
If it was said on slashdot, it MUST be true!
While RedHat is building brand identity in the Linux distribution space, I believe Cobalt is in the business space that ultimately will change the world: turning the server into a commodity.
If the basis for stock price/market valuation for an Internet/dot-com/etc. is really based on expectation of ability to significantly change the computing world a la Netscape (rather than mere celebrity value), I would bet my money on Cobalt rather than RedHat.
I believe this was in the New Yorker. One of those one-paned cartoons.
A bum sits on the street holding a sign that says "Spare a dime?". He is totally ignored. Look down the street a half a block, and a man is sitting on the street with people crowded around throwing money at him in large amounts. He is holding a sign that says "SpareADime.com"
Just goes to show that in some economic climates you get a feeling that you just can't lose. I think that the stock price for a lot of those high tech companies is vastly overvalued, and therefore bad for the economy, but investors do what they want to, because the stock market and the economy are not driven by rational decisions, but by greed.
I think RedHat is a fabulous company, and of course I wish I had bought their stock when it IPO'd, but I think that even though it's fallen significantly from its highs right after the IPO it's still overvalued. Same with these Cobalt clowns - I don't mean to come down on the company really, I'm just thinking that you can expect their stock price to take a nosedive, and then straighten itself out and begin rising steadily probably in the $80 range or so if Redhat has taught us anything.
One thing is for sure: In IPO land, unless you get in right at the offering price, it sounds like speculative day trading to me. I guarantee many people are going to lose their ass because of cobalt stock within the next 2-3 weeks because of profit takers realizing that the market has gone irrationally high on the price and taking their profits.
David
-- Truth goes out the door when rumor comes innuendo. -- Groucho Marx
There is a way to take your company public in a "fair" way: the OpenIPO (http://www.openipo.com) method. Note that the two IPOs to date (Salon.com and Ravenswood Winery) did not have a mega-pop on IPO Day.
So why do companies continue to go public at ten to twenty dollars, and then watch as that stock zooms to fifty, a hundred, or even more? They are losing lots of capitalization, by letting all of the investors "flip" the stock, right? That money should go to the company, right?
Well, maybe not. A company who has released five or fifteen percent of its shares in the market, and the market has been skillfully "marketed" by pre-IPO hype & the expert promotion of the underwriters, is in a great position for future financial transactions.
For example, Cobalt still has a huge amount of shares which are retained by the company. These shares have great value as currency for acquisitions, secondary offerings, and (hopefully) enticing young engineers to come to work for the company!
Finally, this sort of IPO-day bottle rocket gives them great press on CNN-fn, "Day Trader's Daily", and the other financial equivalents of "Entertainment Tonight".
Looks like it's taking RedHat up with it. I'm betting a simular thing will happen when LinuxCare IPO's.
If only I had enough money set aside to actually ride the wave.
-- I'm the root of all that's evil, but you can call me cookie..
It'd be really cool if slashdot had a customizable slashbox with quotes it in. I bet they could make a deal with Yahoo or something to provide it, and clicking on the stocks could take you to profiles at Yahoo biz.
I sincerely hope this is only getting posted because the stock jumped idiotically high. I used to read news.com almost as much as /. but now it's gone from a tech news site to a financial news site focused on tech stocks. I'd hate to see /. get littered with headlines about "product offerings" and companies "beating analyst estimates". It really doesn't interest me in the slightest.
Bite the hand.
Well, now Cobalt (having shipped 17,000 servers) is kicking the crap out of SGI in terms of market cap. Those guys really should put out a high-end Linux server appliance anways. Cobalt/Rebel.com have not even come close to sewing up the market, and the SGI boys have more than enough engineering expertise. --JRZ
While nobody sane should buy at US$130+, Cobalt has a very, very nice product. Turnkey, affordable, rackmounted, powerfull enough, sleek. Perfect for the ISP market and intranet market as well.
There is a trading method known as "shorting". I'll get into that in a minute. "Normal" trading is when you go "long" - you buy stock in anticipation that the stock price will rise. Your risk (of losing the investment) is basically made up of a) how likely the stocks are to drop in price and b) how many of them you have. :) ).
You can attach a reasonable guess at where you think you want to "chicken out" and cash in your stock, at a higher price than you paid for them. Basically, you buy stock if you think the stock price will rise.
Shorting, on the other hand, is used when you think the stock price will drop. You borrow stock from your broker (your broker will borrow it on your behalf for a small fee (about 1-3% although YMMV)). Your broker will "call" you on this at some point (at either a fixed time in the future, or at any time before this, depending on your broker's stock borrow conditions - we'll assume in 1 week with no early call). When you are called, you must return all stocks you borrowed. So let's say you shorted 100 stocks at $146 - this will cost you your stock borrow fees only at this point, but you can sell the immediately for $14,600. Now, in one week's time, let's say Cobalt are trading at $10. You buy 100 stocks (worth $1,000) to return to your broker. You've just made $13,600 (minus your stock borrow costs) for shuffling money around!
Sounds too good, though doesn't it? You're right. If the price continues to rise, you lose big time. Say that the stock price continues to $200 when you must return your borrowed stocks. You now have to buy 100 stocks ($20,000) to return, so your loss is $5,400 plus stock borrow. The danger of shorting is that there is no brake on the upper price of a stock - if the market is really confident in the stock, it can skyrocket. You can predict what your maximum profit can be (ie if the stocks are near worthless by the time you have to return them) but not what your maximum possible loss could be.
As there are big movers and shakers shorting these stocks over time, you will see a rallying fluctuation in the stock price after the first dump, as traders are buying back their borrowed stock, driving the market high again. This causes increased volatility in the market (amount the price fluctuates over time), and makes investment riskier.
Basically, for a small investor rather than speculator, shorting stocks is a Bad Idea. Be aware, I am not an investment professional, don't sue me if you act on any of the above and lose money (I know how much you US guys love your lawsuits
If you want a better description of stock market machinations, have a look at The Motley Fool.
Strong data typing is for those with weak minds.
Can anyone explain why it is considered "successful" to sell stock for $20 that you could have sold for $140?
It seems like a very bad deal for the company to me!
Sure, you want the IPO to be a good investment, but increases like this just shows a severe misjudgment of what price to charge, doesn't it?
Well, for the average investor it is very, very difficult to get shares at the offering.
They go to institutional buyers and top clients of the underwriter's brokers.
A lot of the online brokers will have a lottery system where you might luck out and be able to get 100 shares... but generally you will only get offered crap. If you do not purchase the crap, a lot of times you lose the chance to get anything that is good. Though I am of the opinion that online brokers are a mistake.
After these shares are issued at the offering price... the holders then have the oportunity to sell those to the general public (the stock market essentially). Usually not too many shares are issued... and if there is a lot of demand for the company, the price has to rise in order to meet that demand. So you see what is called a "Gap Opening". The price instantly goes from $22 to $139... there is no in-between.
That is all the stock market is: Supply and Demand.
Keep in mind that there has to be a seller for every buyer in the market. If there are more buyers, the price has to rise to a level to incite more people to be willing to sell their shares in order to meet the demand of those who want to buy the company.
In the short term, the market is driven on these emotions... and very hard to predict (over 90% of day traders lose money).
The only way to make real money... and continually do it is to buy, hold and accumulate quality companies (at reasonable levels of course).
Do not waste your time with IPO's... they are a losing game. Even when you can get them. In fact, of the Initial Public Offerings that have "made it" (companies are still in existance), they have a combined average annual return of around 4% over the past two decades. That is meager at best.
I see even classic Slashdot is now pretty much unusable on dial up anymore.
since they are listed as a competitor to Sun, and Sun has been so kind as to blow off the open source movement and give us all a polite fsck you. I just wanted to express my opinion that I hope they rip Sun to shreads in the marketplace.
According to quicken It opened at $139. It's only around 144 (did I just say "only"?). So you couldn't make the big money like you could have with RHAT. Unless of course you could have bought the IPO. I know I couldn't so this isn't a big buy for me. I'll wait till it comes down to around 80.
;)
It looks like we are shifting from the dot.com companies to the free/open source companies.
Steven Rostedt
Steven Rostedt
-- Nevermind
It is (and has been) unbelievable.
:)
But it has been pointed out that this is very different from a typical internet IPO Hey! We have a cool web site that loses tons of money, but we are going to make it all back on banner ads!!!
For instance, the server market is expected to grow to a $15.8 billion dollar industry by the year 2003 (it is $2.2 billion right now). That is about a 700% increase (about doubling every year).
Consider the company:
101 employees
revenues of $7.7 million for most recent 6 months
net loss of $8.2 million for same period.
and some big time competitors
that does not impress me too much.
But that is enough to make it into a $700 million dollar company
They raised $110 million for themselves... that will certainly give them some clout and freedom, but will it last after the capital is drained?
If you buy into Cobalt right now... you are betting that they will be able to increase their revenue by 1,000% in the next few years (and that is assuming a 100% profit margin... which uhhh... is not quite possible, so consider it is much more than 1,000 times). That is considerably larger than the market is expected to grow... so they need to be buying *A LOT* of companies and stealing a shit load of market share in the future. Things need to go VERY well for them.
In other words, a pretty risky investment right now.
Even so, I reckon it'll do well. I think the market is finally realising that there -is- such a thing as a free lunch, if you include stone soup. Distributed efforts make for better bets than closed, isolated companies, in their ivory towers.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
Could someone explain how IPOs work. If I look at yahoo they say that Cobalt has changed +554%.
But the Day's Range goes from 130 - 158. So if I had put in a buy order on Cobalt below $130 at the beginning of the day I wouldn't have got any stock?
Sighh, some day I have to learn how the stock market works...
I have to laugh because doonesbury has had a story line on this very topic. This whole thing is just like a comic strip!
The strip in todays paper was even better!
Steven Rostedt
Steven Rostedt
-- Nevermind
I am not a big fan!
So, it's not only US investors who are insane but it applies globally.
In Finland the allocations in IPOs are much more fair than in the US: All public is usually allowed to participate and the "public investors" quota is more or less evenly allocated to all the participants. In this case, everyone got only 25 shares :)
Please keep in mind that we are dealing with a rare market... IPO's are rarely this strong. Infact, the last time thre was this much demand for IPO's was the last 20's (not to sound too ominous).
Even in today's market, for every great IPO, there are 20 other duds.
The fund is also not quite what you think it is.
The majority of it is not actively invested in IPO's per say... but companies like Amazon, E-Trade and Radio One.
In the past 3 months (a very good IPO market), the fund is actually down 6%.
I'm hoping that they will when they show off their distro at Comdex -- Cowpland is talking right after Bob Young, so I have hope.
----
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
Weren't these the people that left root's history file web accessible?
.
The stock market (as far as the Internet and high-tech sectors are concerned) is no longer fueled by company profits, strong market forcasts and innovative products. The stock market is now one big giant casino.
- ----------------
In Vegas, you can get a hotel room for $15 at a semi-decent place, a tasty lobster and filet mignon dinner for $8, only because the market is fueled by gambling. The casinos inside the hotels make enough money to cover every other expense incurred by the hotel. Drinks are free, room and board are almost free, which would put a normal hotel out of business. But the casino keeps them in business.
Wall Street is Silicon Valley's great big casino. The market's desire to gamble away it's money on stocks (big money, big money, come on Black 47!!!! Papa needs a brand new bag!!!) keeps the Internet company's in business. Look at Amazon.com. No profit. What's that? That's right, no profit. None. At all (AFAIK). If an autmobile company posted 4 straight years in the red, they would GO OUT OF BUSINESS. Even if they did own their own stock, that would only hurt them. But as long as an Internet company owns some of it's own stock (i.e. has a cut of the casino's earnings) it doesn't need to worry about profits (charging for drinks and lobster.) But this ONLY applies to high-tech for some reason. Imagine if Exxon lost tens of millions ever year, maybe even every quarter. Their stock price wouldn't soar at each SEC filing. It's amazing. An Internet stock will jump as much as %20 at a bad earnings report. As long as they lost less than analysts predicted (Jimmy the Greek.) "Yes, we lost $250 million dollars this quarter, but analysts predicted that we would lose $270 million, and that justifies our stock jumping from $12 to $159 per share." It makes no sense, and eventually, people are going to figure this out. When people start selling their stocks to cash in on their Internet wealth, the value will drop dramatically because there simply isn't enough value in the average Internet company to justify the outrageous prices of the average Internet stock.
-----------------------------------------
Years, ago, when Netscape did their own IPO, there was a list floating around SillyCon valley of calls that Netscape supposedly received before the release. (Someone may still have a copy; if so, please publish the URL.)
As luck would have it, I was just cleaning up my bookmarks and look what I just found...you need to scroll down a bit.
What I'm listening to now on Pandora...
Well...the opening prices was really 22 and not 139. The first trade was 139. Folks who had the advantage of getting in at 22 (institutional investors and people close to the brokers) did very well...better then redhat.
Pat-
these guys offered me a job a couple months ago and i didn't want to move !@#!@ damn it.
Well, I had an order in to pay as high as 50/share but, needless to say, that probably won't execute.
For those frusturated about not getting in (as I am), I've been looking at this:
They claim to leverage their "institutional" nature to get in on IPOs, plus they also invest in recently-IPO'd-companies. Could be a way for some of us to get a piece of the pie.
At least this shows strength for Linux-related companies. Hopefully VA and Andover will see such success...
----
Life if possible, art at any cost.