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VA Linux Systems Sends "The Letter"
synaptic was the first of several to note that "The Letter" offering Linux developers in on the VA Linux Systems IPO. Its a hefty 600k PDF file containing a prospectus, and a form to return to show interest. No word on how many people are getting the letter, but the rumors are that there will be quite a few.
Are Canadians shut out? I got "the letter" but it seems that, being a Canadian citizen, I'll be ineligible. That sucks. :) Please tell me I've missed something obvious...
On the possibly-hopeful side, I'll have a working visa (H-1b or something like that?) by early January, and I'll be in San Francisco at my new job. Does this mean anything? I'd love to get in on this, but I'm afraid I may not be able to. *sigh*
In any field, find the strangest thing and then explore it. -John Archibald Wheeler
Will this be for US residents only again?
Can I get a mailing adress with that Mr. Coward? Is it at all like finding a Mr. John Doe? :-)
How do VA plan to avoid the troubles that RedHat had when they sent "the letter"?
Urgleburgle
I want to get in on this IPO as I did on Red Hat but with this it looks like ill be buying it at 40+ higher than what it opens at. Damnation.
(http://www.ms-monopoly.com) -- (http://www.kmfms.com)
Not all of the shares will go to the developers.
(http://www.ms-monopoly.com) -- (http://www.kmfms.com)
... if this one is going to take off like so many of the others. Just look at some of those IPOs... if you get a chance to buy a few thousand shares, you can make a tidy fortune in less than a day. Kinda scary though... rags to riches in a matter of the opening bell. At any rate, I'm heading on over to witcapital to see what they are doing with the deal. =) I hope VA gets the money they need from this, they sure are one of the forerunners out there.
==============================
Fran Frisina (franf@hhs.net)
Yes, you can make money on the web!
http://www.zero-productions.com/money
Man is born free; and everywhere he is in chains.
OpenIPO: How It Works
OpenIPO is a new way to take companies public that opens up access to IPOs. Based on a Dutch auction system designed by Nobel Prize-winning economist William Vickrey, OpenIPO uses a mathematical model that treats a bid from an individual the same as a bid from a large institution. This means OpenIPO offering prices are set by the market. The result is a price that reflects what people are truly willing to pay for the stock and the likely allocation of shares to long-term investors rather than speculators.
As in a typical auction, the highest bidders win. But there are two important differences. In the OpenIPO auction, bidding is completely secret, and winning bidders all pay the same price-the amount of the lowest bid at which the deal can be completed. Access the sample auction which illustrates how it works.
When it's done once (RedHat), it's OK. The second time is already a trend, and this trend is something I don't like. Because Linux is not about the money, and these people change that. There is someone sitting there, saying "OK, this guy did this and this, he gets 300 shares. That guy did that and that, he gets 100 shares."
All animals are equal, but some are more equal than the others?
Also, now you will be getting people enhancing Linux not because it's cool, but because it's generously rewarded by every IPO-going company. Many open source projects will get abandoned. Resentment will grow...
Road to hell is paved with good intentions!
The word "woman" is no longer politically correct.
The word "woman" is no longer politically correct.
You should use "Female-American" instead.
http://biz.yahoo.com/ipo/p/lnux.html
VA is doing their best to let non-Americans in on the offer, and you don't have to meet some arbitrary standard of financial status to get in on the deal. I just wish they had given a URL to the pdf instead of dropping it in everyone's inbox.
Chris (VA)
--
Grant Chair, Linux Int.
VP, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
From one point of view, they're the oldest Linux OEM out there. They have pretty good sales and a decently growning market. On the other hand, they only sell Linux boxes. Because of this, they're missing out on a majority of the desktop and server markets.
Sane target price: $25.
Now, let's be realistic. They have the word "Linux" tied to their business plan, and every daytrader out there knows that Linux == Gold. I mean, look at RHAT (closed at 143 3/4) and COBT (129 1/2). Money money money money! Get rich quick! Buy now! The market will never go down, ever! Quick! Pass the crack!
Probably Target Price: $165
It's a sick, sick world.
----
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
I'm sure I'm painting a target on myself for saying this, but should free software really spawn billion dollar IPOs?
I just returned from Comdex, where I was suprised to agree with something Scott McNealy said. To paraphrase, he said Solaris is open source as long as you don't plan on making any money with it yourself, if you want to make money, then Sun wants a little piece. That seems reasonable, and I agree granting shares to open-source developers is better than giving the shares to the sharks on wall street, but I think we can do better.
Linus Torvalds was ecstatic at Comdex at how much money Red Hat is worth. I can't help but think this will only splinter the Linux distributions. Now the almighty buck will be in the back of many developers minds when they "contribute" to the Linux community.
I can see the Linux developer cliques starting now...
-DS
"Any sufficiently advanced technology is indistiguishable from magic." - Arthur C. Clarke
No need for a letter.
Yes, that's what my understanding was. The question then becomes: what does "The Letter" really gets you?
The only thing I can think of is that there might be an upper limit on the total number of participants, and the invitees get the first dibs. Nothing to do with the eventual share price, but the total number of participants might be limited.
--
...because today is November 23rd 1999, and their frontpage already has a press release dated December 1st 1999. Which doesn't really make me feel confident that they'll fare well with Y2K. ;-)
Why do you think Corel's stock hasn't skyrocketed?
how did they pick who they sent letters to?
Good reasons to buy VA Linux:
- VA Linux are an established brand name in selling Linux-ready machines, in their own words "The Leader in Linux Servers and Workstations".
- They are effectively number one in selling a niche product.
- They have excellent products (They won Best New Hardware in the Linux Journal Editor's Choice Awards).
Compare this with the LinuxOne IPO:- Vapourware product. Only a beta available.
- Not original - based on RedHat 6.0 for Intel
- The functionality of their product LinuxLite which runs Linux off a Windows hard drive, is already within most Linux distributions just by using UMSDOS.
I know which one I'll be backing!J.
There are a finite number of shares offered. Companies are allowed to reserve shares for their employees and selected others. The rest of the shares go to "everybody else", which generally means large institutions. The Letter gets you the oppportunity to buy from a pool of stock which most people don't have access to. You're not guaranteed to get in (AFAIK), but your chances are significantly better.
The way Underwriters work pisses me off. Look at COBT's IPO. Cobalt's IPO price was, what, $22/share? They opened at nearly $130!
This is f*&cking absurd. They aren't "up" $108 points. The Underwriters bought the shares from Cobalt at $22/share and turned around and sold them for $130/share. Do you think Cobalt would have said "no, we only want $22/share, you keep the rest" if they'd known the opening price?
I thought companies go public to make themselves come capital, not to make some greedy underwriters rich. I'm all for underwriters making themselves some cash, but I think there should be limits on how much the underwriters can charge over the IPO price. Either that, or they should be forced to disclose the opening price to the company, who can then better negotiate an IPO price.
Bah.
A word about dutch action: because of the way it is setup, you will not see wild price swings. For those who want to make some quick money, dutch action is not the place to find it. (anyone remember Salon dutch auction IPO? The stock opened at 10 and closed at 10.50.) A major reason for the development of dutch auction was to reduce these wild price swings.
How IPOs work: the underwriter and the company each get a certain amount of shares they can have at the opening price. The company distributes its shares anyway it likes ("friends and family" list). The underwriter usually presents the opportunity to its most active traders and best customers.
One thing to keep in mind is to sell ASAP. It is a rare exception for a company to maintain its first day close. Usually, the price slowly levels off to a reasonable amount over the course of a few weeks following an IPO. So get out while you're at the top.
For those who didn't get "the letter" (including me) and don't have million dollar accounts, you can try to get in on the deal with some online brokerage firms. (Etrade, for example) But they really frown upon those who sell the same day and penilize you in one form or another (usually, by making it harder to get on another IPO in the future). But if this is a one time deal for you, go for it.
My two cents.
witold.org
Within 30 minutes of posting my previous message they sent me "the letter" along with a note that I should have received it before. The note also commented that they are sending the letter out alphabetically and have only reached the M's. So, if your name (or email address?) comes after M in the alphabet you may still have "the letter" in your future.
--
--
All material not otherwise attributed is the opinion of the author or a typo.
Is VA Systems going to do the same thing as Redhat and only offer those IPO shares via E-Trade or something similiar.
Nonetheless, the problems with the Redhat IPO have already been addressed.
-d9
Where else in the system might you find BSD code? csh, man, etc?
If BSD developers are credited, do IPO offers go to the Regents of UCB?
No, of course not.. that would like talking to the FSF about GPL'd code. Forget that.
Even though it looks like flame, it isn't.
Where are all those debian bigots badmouthing about RedHat's supposedly spamming them?
Or maybe, they didn't get the letter???
Or was it just that it was RedHat!
The kernel needs a Gtk/Gnome-based post-install device configuration tools "a la" make xconfig. (Better sig coming soon
Damnit -- my karma's 50 . . . can we move the line, just ever so slightly? . . . :-(
If all you did was buy $1000 worth of VALinux stock at their IPO price you would have about $7000 when it peaked on its first day. Think of the software you could write with that money. Take three months off and code Linux software. Compare to getting pages and pages of certification and credentials together, trying to find a job with only a 1% chance of success, and writing Visual Basic scripts for 3 months instead. Of course, I didn't get the letter.
Don't miss this great opportunity to buy stock in the world's #1 seller of Linux hardware! I bet they sold 13 Linux workstations last year! Heck, this company should be worth as much as IBM!
Seriously, the stock market has gotten WAY out of hand. Look at Red Hat: These guys have annual sales of $7 million. They have never turned a profit and are not expected to any time in the near future. Their main buisness is distributing free software. Despite all this, their market cap is $9 BILLION. Fsckin insane.
Linux rools and Microsoft drools, so moderate this post up already
Ok, I'd really like to get in on this. I haven't gotten a letter yet though, and haven't been subscribed to any development mailing lists in some time.
VA has turned into a great company from what I've seen, and my personal opinion is that it would be a very good investment.
Rich
Obviously you are not understanding how an IPO works. Or maybe you are choosing to not understand.
Anyway, the Company decides they want to raise some capitol. They decide how much of their company they want to sell off, or they decide how much capitol they want. They have some Underwriters come in who audit the business. These Underwriters say, "Hey, I like what you've got going here. Here's what our experts think your company is worth." The Company says, "Cool, I'll give up 10% of that" The Underwriters say, "Okay, that comes to 4.4 million shares at $22 bones each" The Company says, "Cool, I'm comfortable with that."
See, the Underwriter buys these 4.4 million shares at $22 bones a pop from the Company. They are assuming a risk that each one of those will be at least worth $22. If they opened at $50, and nothing sold, and took it all the way down to $10 before it did sell, they would loose a lot of money.
Take LinuxOne as an example. They are Underwriting themselves. Most likely because they are painfully aware that no self respecting financial institution would Underwrite them. They are hoping to issue some paper on a valueless company, get some suckers, and make off with some cash. Obviously I'm oversimplifying, but they are bogus.
So, Cobalt and Redhat may loose out of maximizing the potential of the %'s they gave up to the Underwriters. But, remember, what they held onto also has sky rocketed some 600%. That is why they are potentially worth billions.
Someone moderate that post 'Funny'. Sir, your suggestion that E*TRADE is going to underwrite this IPO is the funniest thing I've read in a long time. I can assure you that VA Linux was definitely in the loop, and they are acutely aware of the spectacular results of E*TRADE's last venture in underwriting a Linux-related IPO. In fact, I have a link somewhere to a CNET interview, which happened shortly after RHAT started trading, of VA Research tactfully promising to "avoid" the same mistakes.
I'm pretty confident that nobody in the Linux world will want to have to do ANYTHING with E*TRADE, for a long, long time.
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Try not to flame me here... I am new to the whole IPO Deal, hence I did not get the letter. Can I purchase this stock online? At the same price as someone that got the letter? Thanks! Sellphone
See what you get for complaining? Money! Hmm... I'm not sure that's the right lesson to take away, but congratulations. :^)
:^) Naw...
:^)
Let's see if it works for me. My credentials aren't as impressive as yours, but I paid Alan Cox to fix NFS on Linux so it worked with 64-bit NFS... (under SGI) Umm... I'm writing RPM Explorer....
See what money does to us?
This
I promise I'm working on a Linux project right now. I'm just not done yet.
This little bit of mail ended up being nearly a megabyte with the attachments converted into base-64. )-:
A simple pointer to their web site would have been sufficient.
That said, I don't see that happening.
Chris (VA)
--
Grant Chair, Linux Int.
VP, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
Now that I've watched a few IPOs roll by I'm wondering what it takes to get these 'offers'? I've been using Linux/FreeBSD for years now and I've never gotten a letter. Is this saying that I'm a loser?!
Justen Stepka
http://www.ruptime.com
Justen Stepka
I help out with the Debian distribution on a daily basis, but I guess since I am not on the official debian maintainer team (it has been closed nearly a year, maybe more) I will not get a letter? Is this only for the top Linux developers or for anyone who contributes to help further Linux?
-Chris
It's still going to be a bit "selective". There are lots of recognized names in the Linux community, however there are thousands more that aren't recognized. I'm one of the later.
:-)
Honestly, I don't know how many lines of linux kernel code I've written -- I've never bothered to count. I, like many, have worked with Linux for years; and I've speced VA hardware for several projects -- one has been using the same pair of PPro200 boxes for 3+ years.
Not knowing how VA has collected the names and/or e-mail addresses, it's possible some people get "passed over" 'cause they cannot be found. Do you know what my e-mail address is? (*grin* No, it's not foo@bar.com) Altho' I'm not entirely hidden -- someone looking for a Linux kernel programmer/instructor managed to locate me via old linux-kernel archives
Personally, I'd be more willing to fork over my money to support VA than I would for RedHat. I just have an aversion to people making money off everyone elses work. (In fact, RedHat has a history of messing with the code for the stuff in their distribution(s) -- esp. the kernel.)
Personally I think the BSD-type licenses are more free than, say, the GPL. Gives more people more options on what to do with the code - which pretty much lives up to the whole idea of other people not having to duplicate the work that others have already done. the code that is currently out there will always be free. any free software programmer can change the license to his code if he wants to - that's what the copyright is there for anyways. it's his, he can relicense it as many times as he wants to. But the ones that are already out there are always there under the old licenses, too (as they were initially given out). Personally - if VA decided tomorrow that they wanted to do something that I didn't think was in the best interests of enlightenment - it really doesn't matter. They have 0 right to any of the code in there. Especially since that is covered under "prior works." I would do some homework before spouting off about these things - you could have at least checked with raster or myself first :)
--
Geoff Harrison (http://mandrake.net)
Senior Software Engineer - VA Linux Labs (http://www.valinux.com)
Geoff "Mandrake" Harrison
Some Random UI Hacker
I probably shouldn't be responding to this flamebait, but people with high karma automattically post at two, not one. If you don't see a word next to the score, a moderater hasn't touched it yet.
Not to complain, but what if you've been proselytizing for Linux. And porting some of the apps your research group worked on to Linux but still haven't gotten "The Letter" from either RedHat or VA?
T'would be nice...:-)
I'm seeing a lot of messages in this thread whining about who did and did not get "the letter". Most troubling are the messages from people who are complaining about how much they have done for the community, but still haven't got one of "the letters". Lets get realistic here folks. VA, RedHat etc all don't "owe" you one of "the letters". They don't owe you anything. These letters are a *gift* to the community.
No one has a "right" to a gift. No one is "owed" a gift. If you get a gift, be grateful. If you don't, be grateful for all the things you do have.
Neither RedHat, nor VA should ever have to explain *why* they chose the people they did to get the letter. They've done the best the could to identify they people they wanted, for whatever reason, to give thanks to. Obviously this effort cannot be perfect. Some people will be left out. Deal with it.
And stop acting like a damn spoiled child!!!
So you called them up, faxed the stuff in, and they didn't have any problem with it? Yowza. That's super-good news. Can anyone else corroborate this tidbit?
:) Maybe I'll give them a call. Shoot, and I would have missed your post if I hadn't read the Score:0 posts on a whim... :)
Er... wait... what time is it in Germany right now?
In any field, find the strangest thing and then explore it. -John Archibald Wheeler
If I understand this letter correctly, you have to be either from the US, Taiwan, Germany, Czech Republic or Spain to take part of this offering. Additionally, you can be from Japan, Finland, Norway, UK, Italy and Poland, but the number of people they will allow from those countries are limited and served on a first-come-first-served basis.
Take Salon.com, for instance. If I remember correctly, their stock price went down after the IPO. The underwriter very likely took a bath on that one.
Just the ups and downs of a truly free market.... :)
I would also like to add a thanks for their attention paid to the fact that people do exist outside the US. No, it is not available in all countries and some people will miss out because of that. However, they are not limiting this capriciously. There are a lot of regulations involved, some quite legitimate some well-intentioned but misplaced or outdated. They didn't make most of the rules, and if they don't follow them, they get in trouble.
yes, this is fucking bullshit,several people in debian received the letters for what? maintaing the latest app to come across freshmeat? Woah, now there is a major contribution. I am a debian developer myself, so no offense to them but why did they get chosen over any others, just because they had more uploads than another maintainer? Maybe us maintainers with few uploads didnt NEED to upload because we got our packages right the first time. Again, this is not directed at anyone but is just intended to point out the fucking idiot criteria VA used to select the people. I've worked hard keeping the GLX project(http://glx.on.openprojects.net) running over the past 6-7 months while maintaing packages for debian. And what do I get? not a damn thing.
I say, may the powers that be moderate this puppy up a notch or two :-)> :-)>
You can please some of the people some of the time, all of the people none of the time, and all of the geeks & hackers.... what do you think this is, a fantasy world?
--
I post, therefore I'm spammed.
-------------------------------------------
I like nonsense, it wakes up the brain cells.
-- Dr. Seuss
Actually, I am suprised. I thought for sure I would be receiving a letter sense I helped Chris DiBona with the book he wrote. In fact, without the initial team, there would be NO book for him to be profiting off of. Lets not even bring up everything I have done to bring Linux into the educational system, and all the other open source projects I am on. Ya ya, I am a whiner, but a whiner that deserves a letter. The funny thing is, I bet the slashdot crew got a letter. Not they would need it. Rob and crew, if you accepted anything less then 10million for your site (which is still nothing in comparison with other website sales, a site like your would go for a few hundred million easily), then you got ripped of by Andover. Ever though of OPENing up the SOURCE of your revenues, like a financial report.
Jeff Knox
Anyone know if the letters are only going out to coders or also to people who've done advocacy work? Like for example, Linux Demo Day (ok, I admit, I'm a selfish, greedy little bastard), LinuxChix, SEUL, etc, etc.
--
Deepak Saxena
Deepak Saxena
"Computers are useless, they can only give you answers" - Picasso
At least one person who can't figure out why he's on their list is on their list.
Most importantly, the letter is *ONE MEGABYTE*. Not okay. I doubt they really needed a 600k PDF, but if they did, they shoulda emailed a URL.
My blog: http://www.seebs.net/log/ --- My iPhone/iPad app: http://www.seebs.net/seebsfrac/
in that case, I am only willing to pay 22$ a share for VA stock, and I think everyone else should make it clear that they only want to pay 22$ too, that way at market open, we can all score some shares for the lovely price of 22$, and all make a nice profit when the market sees the "linux" part and drives it to some insane amount. =]
Would somebody who actually got the letter post it so that we (the one's who didn't get it) can see what the hell everybody is talking about? A link to a copy of the pdf file that was sent would be very interesting too...
You're right, t's not flame; it's flamebait. And I'll bite.
RedHat did spam me; it spammed many (but not all!) Debian developers. It spammed email addresses clearly outside of the USA as well. What's this about supposed spamming, hmm?
There are many reasons I was more upset by the RedHat spam than I was by the VA spam. One is that RedHat sold (or gave) our email addresses to an organisation that promptly re-sold said addresses. After the RedHat spam, I received and am still receiving spam after spam after spam at an email address that was up to that point almost spam-free. Another is that RedHat didn't bother to filter non-US addresses before spamming with information that was clearly US-only, something that you'll recall caused a great uproar. Yet another is that RedHat spammed what is, to RedHat the corporate entity, their competition; that's very dirty in my book. Comments about RedHat's community involvement and the Open Source Community are unimportant here; the corporate entity doesn't sell RedHat boxes to Debian users, remember, and that's what shows up on their bottom line. There are more points, but I'll leave it here for the moment. I'm replying to flamebait, after all.
How do I feel about VA Linux's spam? Well, that Canada wasn't on either "allowed" list irked me. Then again, they -- and I mean both VA itself and the underwriters here -- didn't spam me at a nationally-affiliated domain, so it's not their fault that they didn't know that I'm not elgible. And they are not in competition with any organisation I'm affiliated with. Even that alone puts VA in my good books.
Spam is spam, but this one's not quite as bad.
I know where they got my address (CPAN). It looks much like spam, honestly. I don't really understand why they felt the need to 'push' it onto us, instead of having us grab it from the site. On top of that, I'm apparently not eligible for it, being in France.
--
Just when i was looking for something to invest 10k in... i should make a killer on this!!!
MarNuke
--
--
I believe ESR will get a sizeable share :)
:)
Now he can stop talking about his wife supporting him while he's working for the good of our community
Ballerinas have fins that you'll never find
But I'm skeptical. How do I know if it's authentic? Yes, I've helped develop a number of open source applications, but I never thought that I'd stand a chance of making "the cut".
Is there someone I can contact at VA Linux? Or can I somehow look myself up in a list online? Has anyone else attempted to verify their letter?
I'm a leaf on the wind. Watch how I soar.
I think this is bad. These IPO's are going to really hurt the Linux community and drive developers away from the platform.
Sure, its because of jealousy and greed, but I'll be honest and admit to it. I'm still pissed off I got boned on the RedHat thing, while in total friends and aquantences I know (and largely pushed to get involved with Linux) are collectively sitting on over a million dollars in Linux stock. The numerous bug reports sent to RedHat meant nothing. The fact that one of their primary distributers would have never heard of them if I hadn't been pushing it as something worth selling meant nothing.
Its changed now. When I want to GPL and contribute code to the community (or patches, bugfixes, features, etc...) I can't help but think twice now. I never once had a problem with someone taking something I wrote and packaging it and selling it for greater convenience and ease of use for end users. But making billions of dollars in virtual cash because of inflated stock prices where my hard work is involved, and I am unable to experience those gains myself? That's something totally different. That just sucks.
Ok this is cool, it appears VA's broker's NT systems couldnt handle sending out that large volume of email, so I didn't get 'The letter' until this morning. Sorry ;)
Quite. And also: - VA employ a lot of really talented developers. Who do you know that works for LinuxOne? That, IMHO, says a lot about their future viability. - VA seem quite well in touch with the Linux community, and take pains to work well with it, wheras LinuxOne seems quite unconcerned at much recent bad press.
"Apparently" it may take a while to send out hundreds of 600kb e-mails. My guess is that not
everyone has received theirs yet.
When?
When do they make the IPO?
WHEN?
------ Curiosity killed the cat. {satisfaction brought it back | it didn't die ignorant | lack of it is killing mankind
The sheer size of that letter is enough to get it rejected by many mail servers which have size limits. Maybe that's why almost nobody got it? Could anybody of the lucky few who got it check if it contains a contact address? Maybe we could ask to check whether we're on the list and the letter (or rather, the parcel) merely bounced?
... aren't that bad. Usually, it's place of residency that counts, not nationality. And place of residency is where you live. So spend a few thousand francs on a plane ticket to the US, file a change of address, cash hin, and take the plane back home with a few hundred thousand francs. Looks like a deal.
Half the time it's the writer who doesn't put in the thought, half the time it's the reader. I've also noted by your karma (-2) that you don't seem to have much in the way of writing ability either, making your entire contribution to the community largely negligible, and thus making you a hyppocrit. Not to attack you on a personal level, but you've offered no practical arguments to defunk.
And not to mention, many sendmail servers block mails of that size, especially if they are well configured ('cause of spam, you know...). Could that be the reason nobody got their "parcel"?
The market tends to look at the future... if Red Hat is the dominant Linux distro 8 years from now, and Linux is the dominant OS, then Red Hat might be rakin' in lots of money. So investors are willing to pay $$$ to get in on it now.
-- Erich
Slashdot reader since 1997
That's all I can say for now. Quiet Periods are very restrictive.
Chris (VA Linux Systems)
--
Grant Chair, Linux Int.
VP, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
--
I was wondering if someone would be so kind as to email me the letter that VA sent out. My E-Mail address is darksoul@tampabay.rr.com
Thank you very much!,
Nick
I got "The Letter". To be honest, I had to read it twice before I could even figure out what it was about. (But then again, I just might be stupid.) Sadly enough, being in Brazil, I'm not elegible (sp?). So there goes my chance to get into the stock market. *sigh*
To the editors: your English is as bad as your Perl. Please go back to grade school.
Does anyone know how I can find out or can speculate when they are going to be actually open for trading on the open market? I REALLY wanna buy into these guys. They look like a good investment and should help promote linux at the same time:)
Still kicking myself (especially today) for not buying into redhat the first day. Up 17% today!
What a crazy market..
Anyone else have an opinion on how the market might respond to a hardware company associated with linux? IMHO it should do well.. Yours? Speculation of course..
Malice95
This is a real story.
:P
I went to my local grocery store (Publix, Tampa, FL), and saw this sign on every check out counter:
"Hiring, P/T or F/T, w/ Stock Option".
For 1 split second I was thinking get an application...
For the next 1 split second I was thinking about post it here on slashdot.
I guess I need to get a life other than online trading.
Seriouly, it feels like 1928 all over again, if you remember...
--- You make things foolproof, and they'll find you a damn fool.
So, hand them their answer on a silver platter (do the legwork with the relevant Brazilian institutions), and they might just accept it. Be persistant. Call back often. Keep your calls longwinded. Let them understand that they will waste more time denying you access than just accepting you.
Yeah, we missed 1 or 2 bug lists /lug lists. It was bound to happen. When it happens, we've foudn that many of the people qualified anyhow, hence the phone call. I'm in florida for thanksgiving, but I'm goign to give a further once over on these on monday.
Chris DiBona
VA Linux Systems.
--
Grant Chair, Linux Int.
VP, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
Lots of people are going to need to decide whether they are going to pony up a minumum of $1,100.00 to buy shares in VA. Be sure to follow their instructions and READ THE PROSPECTUS before you agree to buy the shares.
And to protect myself from the lawyers, I need to tell you that I am not offering financial or legal advice. I'm just some schmuck who has thoughts to share. All are offered as-is with no warranty, etc. etc.
The S-1 Filing for the company is available online. Note that they also have a number of S-1/A filings online.
Here are some thoughts on the company:
Thankfully, VA has a fairly good revenue stream ( 1998: $5,556,000.00 1999: $17,710,000.00 ) however, when one looks at the cost of revenues it also goes up, and in fact goes up disproportionately. ( 1998: $4,494,000.00 1999: $17,766,000.00 ).
This means that while VA had a pretty good gross margin in 1998, they actually went negative for 1999. Not a good trend.
The "gross margin" they mean here is how much they earned or lost by producing their product. A company can never be profitable until the gross margin is positive. When the gross margin is negative, the company is losing money on each unit sold. When the gross margin is positive and the company sells enough units they will make a profit, what being in business is ultimately about.
One has to wonder what happened that the gross margin went from $1,062,000.00 in 1998 to -$56,000 in 1999. Why did the cost of revenues go up so much?
Deutsche Banc Alex requires you to send funds within three days of the IPO to cover your positions. Additionally, they take 10 days to wait for your check to clear. You may not transfer the shares to any other broker until your check has cleared. Note that they do not appear to offer online trading, and only have a single non-800 number listed to trade shares. They will only accept market orders (e.g. sell at any price) for the first day. All this for the low, low commission of $53.
The prospectus says it best:
We have a history of losses and expect to continue to incur net losses for the foreseeable future.
We incurred losses of $14.5 million in fiscal 1999 primarily due to expansion of our operations, and we had an accumulated deficit of $29.9 million as of October 29, 1999. We expect to continue to incur significant product development, sales and marketing and administrative expenses, particularly as a result of expanding our direct sales force. In addition, we are investing considerable resources in our professional services organization and our Internet operations. We do not expect to generate sufficient revenues to achieve profitability and, therefore, we expect to continue to incur net losses for at least the foreseeable future. If we do achieve profitability, we may not be able to sustain it.
No plans to make money into the forseeable future? Ouch. Now you know one reason why IPOs are considered risky. If their cost of revenues (which does not include administrative, sales, marketing, etc. costs as far as I know) does not come down, they'll be unable to make money even if they "generate sufficient revenues".
We rely on Synnex as our single source contract manufacturer. If Synnex is unable to meet our manufacturing needs or our relationship terminates, we may lose revenues and damage our customer relationships.
So VA's server business (which in an earlier risk was mentioned to be 59% of their fiscal 1998 revenues and 88% of their revenues in the quarter ending October 29 1999) is completely tied to Synnex. Who's Synnex? Are they a stable company? Any risks associated with Synnex would naturally be inherited by VA due to this single-supplier arrangement.
If the Linux developer community fails to support us or reacts negatively to our business strategy, our business will be harmed.
The third parties in the Linux developer community, upon whom we rely to develop and maintain a majority of our software, may not continue to support us, our product promotions or our corporate or operating decisions. If we lose the support of these third parties, we would be forced to rely to a significantly greater extent on our own development efforts, which would require us to hire additional developers and increase our development expenses and could adversely impact product release schedules. In addition, negative reactions of third parties in the Linux developer community could harm our reputation, diminish our brand and result in lower net revenues.
Hmmm... they must read Slashdot as well. ;-> I personally don't think this is a significant risk, but yes, it's there.
And speaking of irritating the developers, how about this little tidbit:
We may not be able to use intellectual property to protect ourselves from competition.
Our systems consist primarily of commodity hardware components in combination with the Linux operating system. While we have developed some proprietary techniques and expertise, most of our activities and systems are not protectable as proprietary intellectual property and may be used by competitors, harming our market share and product revenues. To protect our intellectual property, we generally enter into confidentiality or license agreements with our employees, consultants and corporate partners. We have also recently commenced a patent program and to date have filed one patent application. In general, however, we have taken only limited steps to protect our intellectual property. Accordingly, we may be unable to use intellectual property to prevent other companies from competing with us. In addition, we may be unable to prevent third parties from developing techniques that are similar or superior to our technology, or from designing around our copyrights, patents and trade secrets.
This is to be expected from any Open Source company. Hopefully the GPL will be deemed enforceable in a court of law which will limit the ability of competitors to compete unless they too assume this risk.
And yes, the doubts on enforceability of the General Public Licence were also listed as a risk.
You will experience immediate and substantial dilution in the book value of your shares.
The initial public offering price is substantially higher than the book value per share of our outstanding common stock immediately after the offering. Accordingly, if you purchase common stock in the offering, youwill incur immediate dilution of approximately $10.41, assuming an initial public offering price of $12.00 per share, in the book value per share of our common stock from the price you pay for our common stock. For additional information on dilution of the book value of your shares, see "Dilution."
It's pretty common to have significant dilution as part of an IPO, but the magnitude of this dilution is enough to give one pause. Keep in mind that you'd be paying $11-13 for something only worth approximately $1.59.
Of course, if you're just in the mood to gamble, this is as good as any. However, this could be a great opportunity to take a look at a company's financials and really try to decode them. You'll find that it's not that much harder than picking through some ugly perl script once you know how to do it, and it can be much more profitable... ;->
Any other thoughts on the soundness of this company?