Slashdot Mirror
VA Reprices Again
Quite a number of people have written in with the news that VA Linux Systems has re-priced, this time setting their range at $28-30 per share. People have been submitting e-mail reports from E*Trade, so if you are getting anything through there, you must re-confirm. For the friends and family program, remember that you will also be contacted to confirm as well.If you are part of the friends and family program, you can pre-emptively re-confirm by calling the phone number in the initial packet. Otherwise, phone calls will begin 8AM-4PM EST on Friday.
I fully support them raising the IPO price to something more reasonable. It it of significant benefit to VA Linux to do so and, in the long term, it is a good thing for investors becaues it give the company more capital for growth. It is unfortunate that they had to do it at the last minute, but that isn't entirely their choice either. Pricing IPOs is a tricky game; too low and the company doesn't get the benefit they could have, too high and the could flop. Often the build up doesn't begin until after it's first price range is filed. Now, it is unfortunate that it makes their 100 share directed share program far richer than it was initially. Perhaps they should have allowed people to buy less shares. I can't make a judgement on that since I don't know all the issues involved.
Market cap. is short for market capitalization, and is exactly that - it's the value of the company as given by the share price (market). It's simply the total number of shares outstanding times the stock price. When the market is sane, there are rules of thumb that relate share price to "real world" things like sales or earnings growth (e.g. P/E = annual earnings growth rate for a fairly valued growth stock, with a P/E premium for fast growth rates), but the bottom line is that share price (and hence market cap.) is whatever people are willing to pay.
So in the case of VA Linux, 39.7M shares (4.4M being offered at the IPO - both figures from the prospectus) times $30 would give them a market cap. of $1.19B. Of course it's really going to be quite a bit higher!
Please note that they are -very- busy just answering confirmation phone calls and emails that are coming in preemptively. You won't be left in the cold. Most likely they are waiting to send out a batch of email verifying your confirmation.
Chris
--
Grant Chair, Linux Int.
VP, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
Well, perhaps there is room for shennanigans.
The beef this time is that since you have to buy 100 share lots, the letter-getters originally thought they would need $1300 minimum. Now that's looking like $3000. Big difference... it is unfortunate, but well... that's the market, I guess. Sucks for those with small pocketbooks.
It's interesting - this is a pretty gutsy move by VA, they really are betting that the Linux hype this week will continue, I guess. How big is their offering? They may actually get more out of their IPO than Red Hat did...
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The word from CNBC (in my xawtv window) is that LNUX goes public at 12:40 Eastern. The anchor (Sue Herera) just said (@12:28 ET) that "this is shaping up to be the biggest IPO ever."
(Disclaimer: I have been allocated 140 shares. Hence my interest...)
My Blog. Sela Ward can sell me long distanc
Nah. People probably learned the first time.
:) Not only did I lose out on the $75-$300 runup, but now I probably will not get in on the LNUX offering either (I didn't get the letter, and I'm probably blacklisted on E*Trade.)
:)
What I learned, though, is that you should not sell on a 500% gain.
Ah well. Just money, right?
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From: valinux@db.com
To: valinux@db.com
Subject: VA Linux Directed Share Program
Date: Wed, 8 Dec 1999 19:22:52 -0500
Importance: high
X-Priority: 1
X-Mailer: Internet Mail Service (5.0.1460.8)
The confirmation of pricing and your share allocation of VA Linux Systems
will now be Thursday morning at approximately 7:00 a.m. PST. We will be
contacting you at that time. It will not be tonight as originally planned.
Last week, it was $10 - $13 a share. Monday it was $21 - $23 a share. Today it's said to be $28 - $30 a share!? I mean, could some finance person out there please explain why VA Linux is doing this? I mean, are they seriously concerned that $44 million won't be enough and that they need $120 million now? Or are they just milking what seems to be a good IPO time? (due to examples like Andover.Net and Agency.Com?)
I've had to have my father FedEx me money twice this week and now it'll be third just so I can poney up the cash.
Oh well, I guess you gotta have money to make money.
You should never take life too seriously - You'll never get out of it alive.
December issue of Linux Magazine has an article on SGI's Linux initiatives and quoted a "source close to VA Linux" saying SGI would be "a perfect fit ... It makes a lot of sense." SGI has a stake in VA as well as a close working relationship with VA, in the shrinkwrapped Debian project and other things. Article also quoted analyst Stacey Quandt of Giga saying a VA-SGI merger "would be very compelling ... Larry Augustin may also want to acquire SGI because his company is a smaller player in the Linux market than the likes of IBM and Compaq. This would expand VA's mindshare and market share."
Not sure if that's what has been moving SGI stock price upward in the past week. Disclosure: Long SGI
Freedom's just another word for nothing left Zulus
I happen to be a network architect at a firm that uses a fair amount of VA hardware. Here is the main difference, with Dell you get okay hardware, Gateway and Micron you get mediocre. On our VA boxes they are PURE POWER. And they work 100% out of the box. From the time we get a new server to the time its operational and secure is usually about 3 hours for us now (got it down pretty well). Need a database server with 6 NICs in it? No problem, VA does it (might I add the damn thing looks like the sandcrawler from star wars). Need a bunch of high powered SCSI web servers with 3 nics in em? No problem there either (we have 4 of those, they're older 500's). Its not a case of being a desktop system. They aren't desktop systems. We have 1 va desktop system and it works well, but its not what they're designed for. If you can show me a dell or a gateway that can actually challenge one of these that I might agree. But VA boxes are simply awesome. Not to mention the support, they botched part of our config the first time and paid for the next day air to and from (lots of $$ for 4 servers). When I want a box that I need to tinker with I'll go for a cheap dell box (or some knockoff) when I need reliability at work we get VA.
My Slashdot account is old enough to drink...
Dang!
While I understand that the IPO amount can change at any time, it is getting very frustating just attempting to keep up with the pricing changes, especially attempting to wire funds back and forth to cover the opportunity to get into the IPO at Etrade!
According to Etrade they expect this to price in the morning, EASTERN time! Which means the banks will still be closed here on the West coast (Calif)!
Yes, of course, it would be nice to have enough funds just sitting about in an Etrade account, BUT some of us just dont have enough 'idle' funds.
Fact is, the Etrade Broker said that they're not even certain if the price will not increase AGAIN. I wouldn't doubt it. MAYBE VA linux should have gone OPEN IPO?
Repricing is good! Yes, there's lots of hype value right now, but there is also something seriously flawed with an IPO that jumps to 10x its opening price on the first day of trading and stays up there. That means the underwriters didn't do their best to get money for the company.
The real game isn't about making a cheap buck for us lowly investors, its about financing a company. VA is going to have a huge amount of cash after this, it'll be interesting to watch what they do with it.
Everyone seems to be quite anxious to jump on the IPO bandwagon to make a quick buck, but get mad when the system (E-Trade in particular) does things that seem unfair. There are a few things to keep in mind when dealing with IPOs:
1. A company can raise its initial offering price. Period. If you are serious about investing, you'll have to have a respectable sum to invest in the first place. Since you have to buy stocks in blocks of 100 (yes, your trade of 37 shares of stock is matched up with someone else's 63 shares thanks to modern technology), plan to have enough cash on hand to buy at least 200 shares. That way, if the range increases, you can still buy a block of 100 shares and use any remaining money to pay for an odd amount of shares when the stock hits the market. It takes money to make money, and IPOs often raise their price ranges when there is a large amount of interest. Which leads into...
2. A quick bit of advice is to avoid IPOs that lower their ranges. Another tip-off to an IPO you might want to avoid is one that extends the time period of their IPO because a small amount of IPO shares have been allocated and the rest is still waiting for a buyer. After all, the price of IPO stock is initially driven up by the demand of everyone wanting to buy their share of the sure-fire performing stock.
3. E-Trade is not a brokerage firm... at least not in the traditional sense. They aren't obligated to call you and let you know that you need to reconfirm your IPO bid (though they will try to contact you through as many as 5 different e-mail addresses). You need to stay glued to E-Trade the two days prior to when the stocks initially hits the market. The first day is to catch that two-hour window with E-Trade to get in your IPO bid for the stock in the first place, and the second day is to reconfirm your IPO bid (which, unfortunately, happens quite often with the good stocks).
4. With E-Trade, make sure you read their IPO readme. Also, feel free to call E-Trade directly at 1-800-STOCKS5 to get the scoop from a real person. It will be about a 30 minute wait in the hold queue, so be patient.
5. Those 100 share block-o-stocks are delegated by a lottery system when there is more interest than supply for an IPO stock. Even if you have the money set aside to purchase stock, you may not get it. It really is the luck of the draw in some cases.
Nobody ever said IPOs were an easy way to get money, only a quick way. Still, the payoffs are worth a little time spent in preparation. Take some time to learn the system before trying to jump into the deal of a lifetime and you'll end up with much better results.
>
Since when did E*Trade became a LNUX underwriter?
VA Linux has some 'splaining to do.
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E*Trade probably got its share allocation via its partner E*Offering, which is an investment bank.
AFAIK E*Trade has nothing to do with the underwriting; it's just buying a hunk of shares as an investment (and passing some on to its customers [mainly those "Power E*Trade" people] at the IPO price as a perk).
Here's E*Offering's page on the VA Linux IPO. Nowhere under "Underwriters" will you see the name "E*Trade" or "E*Offering".
My Blog. Sela Ward can sell me long distanc
They have been allocated shares by an underwriter...at least that is my understanding.
-Michael [Remove two parts of address to mail me]
That's all I want to know. What day? I don't want to get caught off-guard again, like with Andover.Net, which went public without a date on any finanical news site I looked on. Yahoo Finance's last feature on ANDN was on Sunday and surprise! the stock was being sold Wednesday.. by the time I found out it was already at $62/share and the day was almost over. How do you find out when the shares are supposed be sold?? All they ever say is, "the stock offered to the public __this week__ should raise over $XX Million... " blah blah.. goddamnit.. just tell me what DAY! Can't believe how ambiguous it is!
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Linux user: if (nt == unstable) { switchTo.linux() }
Those who laugh at you for you having a Mac.. are the people who constantly call you to fix their PC.
Yes, but remember that it's not just the cash they raise at the IPO, but the value of the stock in the months following also matters to them, since they presumably will use it for aquisitions.
If the stock rises significantly after the IPO, then investors will feel pretty secure and will likely tolerate the large price swings that are likely to happen. If, OTOH, they get greedy and try to squeeze all the juice out of the IPO, then investors may well bail out, particularly as many are probably in it just to stag the IPO (and stay in iff it's rising).
This whole Linux stocks craze is somewhat of a self perpetuating myth. If LNUX gets a good launch and rises significantly after the IPO, then it will likely gain mind share as a Linux stock and continue to do well. OTOH, if the IPO doesn't do so well, then it's possible investors may reconsider or take a harder look, and decide that it's really a Dell, not a RedHat.
While I'm sure the IPO will be a success, given what appears to be insane demand, I just wanted to make the point that it's not in their best interest to "market price" the issue - they need to leave something on the table for the IPO to be a success, which is equally important.
My theory: They reckon their stock's worth at least as much as Red Hat's. Red Hat's is trading almost at the $300 mark. However, they can't just reprice to $300 per share, at the start, without some people being mightily suspicious. So, what they're doing is sneaking the price up, $5 here, $10 there, until they reach the same value as Red Hat. And, incidently, avoid the Y2K headaches on the stock market in the process.
Sneaky, aren't they!
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)
The confirmation of pricing and your share allocation of VA Linux Systems will now be Thursday morning at approximately 7:00 AM PST. We will be contacting you at that time. It will not be tonight as originally planned.
The market opens at 6:30 AM PST. I'm planning to up and logged in at 6:00 AM PST, ready for underwriter fun and games.
e*trade is taking reconfirmations right now. The window for reconfirmations is only two hours guaranteed, so it might close any time. If you have an indication of interest on e*trade you need to go there right now.
WR Hambrecht is taking reconfirmations, too. They mailed me with a URL to click to re-confirm.
It's time to get in touch with your inner suit. Remember guys, underwrites they can play games, they can make you lose, but they can't make you quit!
If this trend of Linux and/or Open Source related companies offering stocks to significant members of the community continues, I think we may have just found how to support the programmers. In fact, this is even better than working for a company: friendly competition develops amongst developers for access to IPO's, increasing code quality and quality of life!
I'm sorry about this slightly off-topic post, but I know Slashdot really can't post a story about its IPO during the "quite period". I and I'm sure a lot of other readers would like to know more information about it. A news.c om story has info about both VA Systems' and Andover.net's respective IPO's.
Do you feel that either of these IPO's are good investment opportunities? Is Andover.net's auction style IPO a good idea? Some investors warn that since institutional investors are not among the initial holders of the stock, their share price could suffer as a result. What do you think?
Sig goes here
I have posted this to another thread, but since Linux stocks are relevant here, I will just re-post.
I submitted this as a story, but it was rejected.
I believe it's very interesting and demonstrates the Linux stock craze in the markets very well.
Check this out:
A bunch of people on Yahoo chat boards touted a company called Perle Systems; which makes I/O cards and equipment, as the company behind Perl. To make matters worse, the company released a news article about Linux drivers for their products to hype the stock further. Thousands of crazy day traders flocked to buy the stock just because the ticker symbol is PERL and they thought it was Linux-related, and the stock is now up 200% in one day.
Go check the stock "PERL" if you don't believe.
The company owns Specialix, which made multiport serial cards, and all they did was to put in a press release that announced the availability of Specialix Linux drivers that have already been around for about five years now.
--
BluetoothCentral.com
A site for everything Bluetooth. Coming in January 2000.
Zigbee Central: A Zigbee weblog
Find the money and hand it over.
(--BS Mode == Bu**Sh*T mode --)
(BS Mode)
VA will close the 1st day trading at $80 minimum. It will close the year at well over $200. Get in now and take out only your initial investment plus 10% next week.
Let the rest sit for at least 6 months. Next summer you will be rolling in dough so just send some this way.
(/BS Mode)
Of course I don't know any of this and have no knowledge or interest in the stock market. I'm a hardware hacker and I failed accounting at high school.
--= Isn't it surprising how badly I spell ?
"SUN stock is going down"
What planet are from? On my planet SUNW just split for the second time this year and went up 10% today. It is a monster stock that is outperforming Microsoft.
Remember -- due to our little friend the quiet period, don't expect any stories about the ANDN stock offering for some time.
;)
We're still welcome to comment about it -- who else watched ANDN more than triple on its opening day?
For more information, click here.
Check me on this.. but I just looked at some
of the systems that they are peddling and the
prices seem way rich to me. Like how much
premium should be paid for a low end wintel box
that already has linux installed (and I suppose
configured properly)? Please correct me if I
am off base but I really do think you can do
better buying from the likes of Dell/GTW/Micron
etc and installing Linux yourself.
Of course I'm 60 bid for their shares when they
start trading...
I'm sorry for the stupid previous post. Did any of you invest in the IPO. How many shares were you able to purchase?
Sig goes here
E*TRADE's latest confirms the $30 pricing, and says customers who've placed conditional offers have until 11:15am EST to cancel if they want to (after which presumably they run their allocation)... Sounds like it may start trading around midday.
That way, you will be listed in a database of open-source software authors, and the next time someone does a Linux IPO, they will let you in on the ground floor along with all the other hackers.
send all spam to theotherwhitemeat@ropine.com
Note that there's another party that gets "screwed" further by the pre-IPO price raises: the Linux community members granted the option to purchase pre-IPO shares; they benefit less from the IPO and VA Linux benefits more.
I don't blame VA for leaving less money on the table, but I'd be surprised if the IPO jump is as large as others we've been seeing. The smaller the jump, the more tempted people are to flip and lockin their win, which could backfire. We'll see I suppose.
--LP
I actually "called it" and told everyone to buy CORL at 11 3/8.
:-) )
Everyone bought it except me, though. Spread the wealth, is what I say...
(Don't forget to save your money for TransMeta!
-m
You could have indicated interest E*Trade in lots of 100 shares - but it's a lottery system, and it's over. And E*Trade's site is down in any case. :/
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