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VA Linux Systems Opens at $300
Well, I'm going to drown in submissions if I don't post the news that VA Linux Systems opened at 299$ a share, which is some sort of record, I'm sure. You can check it's current trading level as well, albeit with a twenty-minute delay. Congrats to all involved.
ok I'm a moron.. I meant 250-260, not 150-160.. and it dropped to about 180, not 80.. I was watching my ticker, leave me alone! -TalGrin
because there are a few simple reasons:
people who work for VA are genius'
VA is like the only linux hardware company
VA has had an excellent past history
now we will eventually see how everything levels out but there is no reason why this couldnt be legitimate
"The importance of using technology in the right way has never been more clear."
Actually, there were actual securities up for auction on ebay once, a few months ago. The SEC put a very rapid stop to that.
Andover.net had its IPO yesterday
Dec. 8, 1999-- Andover.net Inc. (Nasdaq:ANDN - news) was admitted to the NASDAQ National Market System following its initial public offering of 4 million shares at $18 per share. The company's stock trades under the ticker symbol ANDN. Company address: 532 Great Rd., Acton, MA, 01720. Telephone: (978)635-5300.
http://biz.yahoo.com/snp/991208/ipo_2.ht ml
This is absolutely idiotic. A company that doesn't and never will make any real money selling at this prices. The market is going to come crashing to earth at some point and people are going to realize these idiotic tech companies are as worthless as tits on a boar.
Watching this and the Sycamore Networks IPO, I find a really frustrating trend, that the brokers underwriting the IPO bid the price of popular 'net IPOs up incredibly high before releasing them for public trading.
I'm not sure what the exact price was, but VA sold shares initially for about $30. Then, when the public could get them, these shares had risen approximately $270 each.
The Sycamore Networks IPO went almost the exact same way (though it was first available to the public around $200).
I spent some time interning in trading for an investment bank, and as I recall someone once told us that an issue should be priced slightly below where the brokers expect it to stabilize once it's publicly traded. So a $14 issue should end up trading in the $20 range.
Unless I'm missing something substantial, both the companies and the public are getting screwed on IPOs like VA and Sycamore.
Who's making all the money here?
What we are seeing is the almost overnight creation of a new empire. In a very short time brand new companies are coming up with capital comparable to the long time giants. If they utilize this chance they will be able to solidify their presence in the market. Kinda like building the inside of a structure after buildingthe shell first.
penguinicide... when jumping out a window just won't do.
Come on, this is funny stuff. VA Research gets stiffed hard on the money they could have made in their IPO. They lost bucks big time. Linux programmers make off rich. Investors make off rich. Everyone is rich but VA. THAT'S a foot icon.
When a company IPOs, they typically base their price on what they are worth as a company. Investors (well, good investors) try to get shares on what they think the company will be worth in the future. So, if the market doesn't see farming equipment as having huge growth, the stocks won't have huge growth. If the market sees the internet or the medical industry as having huge growth, the stock value of the company will be more than what the company is worth now. Get it?
-- Erich
Slashdot reader since 1997
Eric
And didn't it used to be 15 minutes? Is it just a way to get money for "realtime" data? Is it meant to keep power away from the small investors by acting as a buffer? Is the info publically owned or private?
Actually it hit a high of 90 so far...
Look here
Yep, this is part of the reason why Corel shares started to go up 'n up 'n up. The rumours said that Red Hat was going to put some of their shares towards buying Corel. Makes a lot of sense too, since Corel is profitable again, plus they have the Linux software that'll sell in business circles. Corel even has a hand in a Linux hardware company with Rebel.com and their Netwinders.
...Then use your shares to fund purchases of companies that actually make money. (At least that way when it returns to earth, the stock drop won't hit anyone too hard.)...
With this whole Linux frenzy, I bet Cowpland has other ideas. He's no dope, so watch for a half dozen Corel news releases in the next two weeks as Corel tries to push their stock even higher.
I've never understood why a stock split should be so important, the total value is still the same, so if a company is overpriced before a split, it must still be overpriced after a split, since it doesn't change the total value, i.e. if I have 10 shares at $100, and it's split 10:1, then I will have 100 shares at $10. The only purpose I can see of a split is to avoid monstrous share prices, maybe some people want to invest only a few hundred dollars, and if the share price is in the thousands, that is impossible. Perhaps they're also done to fuel people's belief that the actual share price is somehow related to how the price will develop in the future.
People that understand the numbers will realize
that even though the PRICE of the stock is lower
(because of the split), the company is still
over-valued, and splitting the stock will only
increase the over-valuation, if it continues to
rise at such a crazy pace.
I'm still pissed that I was *THIS* close to making
$30,000 from $3,000 today. }:-(
-thomas
I've been wondering how I was put on their list. Most (er, all) of my open source projects are small and insignificant, and really no one outside a close circle work on them (but, of course, it's open for everyone...). I was like "How the hell did they get MY name?"...now I see...Sourceforge...
Thanks for the info, Daniel.
Jealous - of course. But the market's going to crash to hell - these numbers are idiotic. Based purely on hype, not market reality. Advice to anyone with reasonable intelligence would be to sell the shit out of it once it reaches 200. Sure - you may miss some profit but at least when it hits its real value of like 1.50 a share you won't go broke.
Bahaha you thing VA is actually _worth_ 300$ a share? or even 200$? Major companies with _much_ more in capital and other assets aren't worth that.. Besides.. this is pretty much how _every_ recent IPO goes. No one would touch a stock initially valued at 2-300$, if the company is small and a newcomer.
I'm really not surprised about the opening day so far. Red Hat was the first big deal like this, and all the people who missed out on that one are trying to jump in on this one.
But anyways, althought this situation is a good one that makes a lot of people happy, is still needs a least a little ribbing... So onto the Fake News:
Austin (Reuters) - As part of the ever increasing wave of Linux IPO's to hit wall street this year, linux hardware maker Joe Smarty announced a filing with the SEC to take his company "Joe's Appliance Shack and Pager Hut" public. The company will trade as JSHK.
"We're very confident about the stability of our business and our future product success." States Joe. "For example, take a look at our Linux Toaster. It makes 8 perfect pieces of toast a minute, our competitors can only get 4 pieces using WinCE. We made 20 G's off that baby this year alone."
When assistant manager Steven "Lord Gorth" Ackerman was asked what the new money would be used for, he had this reply: "well, we're looking to expand. Buy a bigger building, hire some new people. The toaster was great, it makes damn good toast, but the market place is so broad! And so much of it is just not being addressed at this time. With another 10, 20 or 5000 coders we could be making refrigerators that double as Quake servers!!! I'd want that. Wouldn't you want that? Everyone needs one of those. Not to mention what we could do with coffee makers..."
There has been some worry however that the hype surrounding IPOs would inflate the market capital of Joe's Appliance Shack hundreds, even millions, of times above the worth of what is still essentially a toaster company.
Joe has no problem sharing his future company strategy with worried investors. "Don't worry," says Joe, "Once we hit a market cap of 3 Billion, we'll buy AOL. Maybe Disney."
Sig:
Barbeque is a noun. Not a verb.
It's because you aren't a "preferred" customer of one of the underwriters. This is the scam. Anyone should be able to get in on the selling price, but it doesn't work that way. How do you get in? Good question. I guess the only answer is become very good friends with one broker at all the major invetment houses. I am serious.
I think it's disgusting the way this IPO thing works. It's geared towards a few people making a LOT of money. If you don't have the connections, too bad. You're left in the cold to pout.
Nope not me either, and I have TWO Etrade accounts that I placed LNUX IPO indication requests.
There is only so much money you can make assembling off the shelf components.
There was enough to make Micheal Dell one of the five richest men in America...
The cake is a pie
My thoughts exactly... Whoever the underwriters were, they did a piss poor job.
I didn't get it. They promised to call around 7AM. At 8 I called them and confirmed the order, no sweat.
But they *should* have kept their promise to call.
Other than that, though, I think DB did a great job on the whole thing. They were reachable and cooperative throughout the whole ordeal.
I tried getting 100 shares with a limit order of $85 a share. Basically it blew right past us at the opening. The first price I saw on my ticker was something like $290.
_ _____________________
Oh well. I made $2500 off of Andover.Net and McAfee the other day, so I'm not gonna complain.
---This routine borders on black magic. Touch it at your own peril.
_______________________________________________
"The code I write borders on black magic. Modify it at your own peril."
Nope.
:)
Put in for 100, got 0.
Now, this may be due in part to the fact that I sold my RHAT within 5 days of the IPO. I thought that 500% was a good gain. Silly me.
Now I'm probably blacklisted at E*Trade, to boot.
Well, what's $27,000 anyway - right?
----
I thought corel would do a lot better today given
all the ipo hype. I tried for lnux at the bell but
to a mere mortal.. 300 was a little to rich for my blood. So I quick jumped into Corel for the afternoon where it basically stayed flat:( well I
made about 400$ but, it shoulda road the hype better IMHO. Oh well, theres always freemarket.com tommorrow.
Mike
Put a Dell workstation and a VA workstation side by side, and yes the VA workstation will cost more. But for that price you get ECC RAM, SCSI tuned for Linux, a CD drive that rips audio properly, a sharper monitor (even if you decide to go with the 17 inch monitor against the Dell 21 inch), and a motherboard that won't break every year. (I'm speaking from personal experience here. Your mileage may vary.)
Maybe in the future things will change, but right now companies like Dell only pay lip service to Linux without actually committing to it. Dell picks hardware to run on Windows and slaps Linux on a few of their machines. VA picks hardware to run on Linux. I doubt that Dell will ever see enough Linux volume to justify the same level of commitment to Linux as VA.
Clearly if you don't have money you don't have a choice, but if you do have money and you want an x86, you can't go wrong with a VA Linux machine.
go linux!
The Faceless Master
http://www.fighters.net
The Faceless Master
Seriously, my broker says the people buying it have no clue as to what Linux is, or what VA Linux Systems actually does, just that it "is" Linux and that it's supposed to be a good company.
They are in bubble mania territory.
I refuse to buy at this price, I'm sorry. When it dips below $100 I'll think about it, but I'd just be wasting my money or going on total speculation at this point.
And I just blew my morning waiting in Seattle (Fremont) for AT&T @Home to install my cable modem and they showed up 3.25 hours late. I left after 2.5 hours and rescheduled. At least they'll let you do a Linux install, but they only guarantee Windows.
Sigh.
Will in Seattle
But it's not guaranteed.
E*Trade does first come first serve.
If you got The Letter, then if you replied you were guaranteed shares (in most cases, some countries they could only take a max of for example 100 investors).
That's a return of like 9 to 1? GAH!!!!!!!!
Chas - The one, the only.
THANK GOD!!!
Chas - The one, the only.
THANK GOD!!!
Look for ANDN
This is interesting - I've been withholding judgement on E*Trade since I knew this is under heavy demand and even random picks would be slim. But if we keep hearing that nobody got anything from them, it begins to cast doubts even among those of us who gave them the benefit of the doubt.
...my redhat shares. We have another open source programmer at my company who got in on va, but didn't get the letter from redhat. It is kinda fair.
Remember this...no eternal reward will forgive us now for wasting the dawn....(jim morrison)
You misspelled 'hype'. I hope this helps you. Clearly it's asinine to claim these prices are justified on any other level.
Dell will have a hard time convincing anyone who's been in the computer industry for more than a few versions of linux that it has a committment to linux.
but then all they need to do is fool the investors, and then their stock price can go to 300 too.
If they changed their name to linuxdell that would be good. Or if they fired all their windows support staff and hired recent CS majors who only used linux, that would be good. Or if they pried all the windows keys off their keyboards and put linux keys on. or if they got logitech to create a mouse that said linux on it...
or if Michael Dell changed his name to Michael Linux... yeah that would be good for at least a doubling in stock price.
... and if Michael Dell called a press conference to announce that "windows sucks!" - that would work too.
or if Dell started shipping servers with hardware RAID controllers that had GOOD driver support for linux and other intel unices.
heh - none of those are going to happen (maybe the linux keys on the keyboard...)
It went as high as $230 a share, and is now stabilizing a bit at around $265.
This puts VA Linux at a $1 billion dollar company right now as we speak. Not bad for a company with about $14 million in revenues (they did not profit) last year.... and they were initially trying to raise about $50 million.
Congratulations to those that weer able to get some at the offering... for those that got it afterwards, you may be in a bit of trouble!
that absolutly nothing got done at VA today?
Erlang Developer and podcaster
Wrong. Priced at $30. Opened on secondary market at $299.
Just another in a long like of big tech IPO openers. Man, if only I was rich so I could buy the stock, I'd be rich! But how long can it stay at $300?
------
Mr. Low Resolution
what Louis Rukeyser is going to say about this, he's usually pretty OPTIMISTIC.
A lot of monied people have tried M$ and found it wanting - they probably know there's GOT to be something better - and Linux CAN fill that order.
Chuck
try { do() || do_not(); } catch (JediException err) { yoda(err); }
Did anyone else who got 'the letter' not get 'the promised phonecall' this morning? No one bothered emailing/phoning so I've been sending email/phoning myself all morning and the mailbox at dbab is full, no one replies to my email and the person on the switchboard keeps sending me back to the full voicemail box.
this, needless to say, sucks.
As you can expect, the underwriters are very busy taking and making confirmation calls. Don't worry about it, everyone will be contacted and every voice mail will be returned. we have 40 people on the phones at DBAB and they are all working as fast as they can.
If you are -hyper- paranoid about not getting through with your confirmation, feel free to email me at chris@valinux.com and I'll forward on your confirmation (if you are in the program only, of course) and answer any questions you might have.
Thanks!
Chris DiBona
--
Grant Chair, Linux Int.
VP, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
"Not bad for a company with about $14 million in revenues (they did not profit) last year...."
EBIZ which runs TheLinuxStore had $15M in sales last year, yet they're trading at $4.5/share.
Clearly VA Linux is over valued. There is only so much money you can make assembling off the shelf components. They basically can only compete in three areas: price, quality, or service. Though my impression is VA Linux quality is higher than EBIZ, EBIZ has better prices. Quality I think is moot as they would have have to hire and train 100's (if not 1000's) of new techs to install and service new equipment if their sales were to get anywhere near where they should be to justify the stock price. Such a fast staffing-up will inevitably lead to some quality problems.
Another company that shows how overvalued VA Linux is, is SGI. SGI has something like 1.2M shares of VA Linux thanks to early capital investments. That stock now represents about 1/6 of the total value of SGI.
Work for Change & GET PAID!
Plus need a lot of miracle.
It went as high as $230 a share, and is now stabilizing a bit at around $265.
This puts VA Linux at a $1 billion dollar company right now as we speak. Not bad for a company with about $14 million in revenues (they did not profit) last year.... and they were initially trying to raise about $50 million.
Congratulations to those who were able to get some at the offering... for those that got it afterwards, you may be in a bit of trouble!
It would be nice but .... Linux greatest chance is not in desktop , MS will win there every time, it is the server side of the business that counts.
So it is not WWW browsers or desktop apps that Linux needs most, it is infrastructure like ODBC that will make or breake Linux.
This level of recognition for Linux has been a long time coming. And it's good. This will channel a LOT of money toward Linux projects, and the companies that haven't yet woken up to Linux fever will now catch it in a big way. That's the plus.
:-)
The minus is that at these prices it will take a LONG time for the underlying securities to justify their prices. That hasn't stopped the craze surrounding things like Yahoo... but in the case of Linux, there are still some issues around how a Linux company makes huge wads of cash. (It's easy to see how a Linux company can make a reasonable living, but that's different).
You make huge wads of cash when you establish a brand and you take away business from everyone else. Is it really possible for VA and RHAT to become THE linux brandnames? Or does the GPL guarantee that they will always have so much competition that their margins will always be fairly thin. That's the minus.
So I'm not sure I would invest in these companies at these prices... but I certainly have invested my whole career into Linux, and this is very, very good for my career
VA's attaction as a supplier of Linux systems is built around 3 areas:
1) VA has capable support for Linux. Now that they've IPO'd, they'll have a tough time out-paying IBM, Compaq, Dell, etc. for the new talent needed to ramp their business. It's going to be tough to attract new talent with options at $250 now.
2) VA debugs/develops drivers for some cards (e.g., RAID); they also maintain that they'll give everything back to the community. So that means that the sources will then be available to Dell, Compaq, Cobalt, etc., who can then sell the exact same config - for less. Ok, sure, maybe a month later. So?
3) VA has a consulting/Professional Services business. And how long can this maintain an advantage? Let's try to grow that with options at $250..
Some rules for commodity businesses that seem to be overlooked:
1) economies of scale reduce costs. Dell, IBM, and Compaq can come out with the same system as VA - for less.
2) Big companies often sacrifice margins to get into new markets. Lets say Dell or Compaq or IBM figure that the Linux server market is a new market that they want to own. They have other significant revenue streams to allow them to buy their way into the market. That they haven't done it yet doesn't mean that they won't.
3) Linux knowledge will become a commodity. VA's current core advantage/differentiator (solid support and ability to offer quality professional services) will evaporate. If Linux knowledge doesn't become a commodity, the OS dies.
Investors should remember that Dell, Compaq, IBM, Gateway, Sun, HP, SGI and others can be part of the Linux community too, if they choose. (Or is it not really an open community?)
What's left? A company that sells Intel-only systems with off-the shelf Mobos and commodity components. Their product line isn't that stellar, and they can't even sell AMD systems.
For VA to succeed, Linux has to succeed. For Linux to succeed, knowledge and use of it has to become more commonplace. If Linux knowledge is commonplace, what is VA's advantage?
Basically, there's the down and dirty: VA is a startup that IPO'd to take advantage of a stock market boom. VA management will get rich. There is no real long-term business model. Deal with it.
- brian j. pardy / posterkid@psnw.com (forgot my password)
I've haven't been allocated any shares in the last 3 E*Trade IPO's that I've attempted to get in on. I've tried to get around 500 shares on digimarc, harris interactive, and VA Linux. I just keep getting the same e-mail. Unable to allocate shares. Possible reasons: Offering priced above limit or high demand for shares I'm pretty sure you need millions of dollars for E*Trade to consider you a good ipo candidate.
Indeed, but back then inflation wasn't regulated and most of keynes major works were not heeded.
Although that's not to say that we won't see out of control hyperinflation or stagflation sometime soon; just that the decline will be a little smoother.
Do you really think that VA has offered all the stock they ever can? They still hold a lot of stock that is very useful for acquisitions, etc. in the future as long as the price remains high.
On the other hand, having cash around is great for those times when the stock is relatively undervalued.
Well, yeah, it's ridiculous. But this is the stock market. Common sense doesn't apply here. :-)
Actually, VA is VERY popular in two areas - big expensive monster computers and web sites. And now service. They will do well.
Look at DELL. It's gone up like mad, and I think VA will probably follow. Of course, it already did to a certain extent, but I think it will continue. Expect VA at $400 within the next few months.
Just because you don't know much about markets doesn't mean you can't comment on va-linux. You probably have a better idea of what va-linux does than most of the "knowledgable" investors of LNUX. I agree with you, va-linux has a better story compared to redhat. I got the letter too and damn right I jumped in on this! As soon as I heard that you could up the shares to 140 I did that.
2 years and no mod points. Join reddit. Because openness is good.
Yeah, and Dell and Gateway are just computer resellers. Imagine if you had bought Dell stock when they went public. Sure, it's gambling, but so is the whole dang stock market :)
Err, if the stock price stays at its current price, it will be the biggest IPO increase ever. I wouldn't call that going "how _every_ recent IPO goes."
Hey, thanks z ! So the "VA" is for Vera and Augustin. What ever happened to James Vera ?
Damn! Hell, got in on Andover with 9000$, thought life was great, but then VA linux ruins it. Gah!
Visit www.Peachsoft.net everybody!
It means that day traders have noticed the same thing most of the Linux stock
:)
watchers noticed the last week or two. So thay drove the price up to huge heights.
Now the ticker is ticking down from it $320 high....
Its at 247... as I type. People who wanted to earn a Ferrari for Christmas
got it, and now are running to the dealership.
So what to do? Hmmm, well one thing is sure. VA Linux is going to all
over the news tonight. Meaning that LINUX will be on the news
tonight. This again, will give the general public more information
about it and many more will see that Linux is a GOOD THING(TM).
This will drive more "Real" investors to Linux companies, which will drive
the Linux index up.
I predict that Linux companies will continue to grow at a faster rate
than the market. I'd even say much faster, but some of you might take
this against me, if it doesn't happen.
Anyway, these are just some of my thoughts after the $13->$23->$30->$250->$320->$247
ride of VA Linux (LNUX) this afternoon.
What to do?
Buy Linux/Open Source related companies at a price you feel comfortable
with. Just don't come to me and complain about losses.
I really think that this conformation from Wall Street means that Linux is
being taken seriously and that it will continue to prosper.
So what companies are we looking at?
Look here to get an idea about some of them.
I hope I didn't bore you with these comments.
Later
...Marko
P.S. And rember how Linus answers the question:
Uninformed Interviewer: What do you want to do with Linux?
Linus: World domination, asap.
:)
-- &&
But it does make sense. I mean these underwriters have to place this stock somehow and they certainly don't want to embarass their company by having the price go way below the IPO price a few days later. So you need people who will buy the dogs and hold them for a while to keep the price up. And so those people get rewarded with hot IPOs.
My, all the doom and gloom.
:)
Yes, Linux stocks are vastly overvalued. Microsoft stock is too. I'd agree a correction is likely, and I share the hopes it won't be too drastic.
But not owning a share of stock myself, I can see this as simply good news. A bunch of people on Wall Street, one of the most conservative and change-hating bastions in mainstream America, are willing to bet a little money on Linux. Nay, they're tripping over their own feet to do so. Hah!
VA Linux and Andover both got considerable stocks of cash out of their IPO, and that won't go away even if the whole market goes south. Since those are two of my favorite businesses, good deal, and congratulations all around.
Andover's IPO may have been especially significant, even if not quite the record smasher VA's was because it is the first instance of a very successful Open IPO of which I've heard. Those who were toying with the idea of buying VA stock after it reached the public, only to find it opening at $300, will readily understand the advantages to regular people of a Dutch auction style IPO now. Andover not only made a bunch of bucks, but they found a way to share it with anyone who wanted to and could afford to buy.
Frankly, unless you've got stock in the market, it seems time to lighten up and enjoy the ride. It's not like it's slashdot reader's money driving the stock to these heights, there's nothing we can do to to slow it down now, and no lack of mainstream voices yelling about the overvaluation already.
I imagine the Linux companies are a bit nervous about the situation too. Who would want to be the one blamed for the stock market tumbling? Not the time for dumb moves or foot-in-mouth disease. Shareholders forcing proprietary schemes on Linux companies to preserve artificially high stock prices is the only conceivable downside I can see to this. Shareholders must be made to realize that proprietary scheming could tank their stock quickly thru developer boycotts and general bad publicity.
Well.... ETrade still hasn't learned how to handle IPOs.... i priced the VA Linux IPO at $30/share and for 400 shares.... and didn't get a single one. Their phone staff is less than helpful in explaining how they allocate shares and they don't exactly "explain" the procedure they follow to award shares. If you work at ETrade, go slap your boss for me.
Actually its driven by neural networks -- every major investment firm uses NN data in some form to make their investments. Unfortunately, these all have been trained to
1. protect the current values, &
2. increase the value of future investments
Its a self fulfilling prophecy, and yes, it is an artificial market--much like the growth of consumer car prices since the 70s; you could get a shiny new Dodge with a 380 cuin V8 engine for ~$2000 in 1970. Car prices are artificially driven sky-high BECAUSE THEY CAN BE.
When the revelation comes that both the market and consumer good prices are the most profitable pyramid scheme scam ever invented, we're in for the great crash of `2000.
i.e. TANSTAAFL
Red Hat still employs only 7 engineers
Not quite true. Where did you get that idea?
Last Time I checked, Red Hat employed 37 Engineers to work on the OS, plus several others to work in support, system administration, training and consulting.
This message is provided under the terms outlined at http://www.bero.org/terms.html
I tired DAMN hard... wiring funds and ALL. NOT a DAMN thing!
I get a strong feeling that the various IPO brokers are playing games with us... I mean at least with the lottery you can see what your ODDS are. Wouldn't it be nice to see at least the past ODDS are to get into these? Then I could figure out if I should spend the money on the lotto instead of wasting the money on wiring funds.
It really is unfortunate that this happens. I also believe VA Linux is an excellent company, and I would love to own a piece of it... but I also want my money to appreciate, and at this level the company has a TON to grow before the stock price has any reason to go up.
The way I see it, VA Linux is not going to be a good investment for another 5 - 10 years (even if the company continues to do wonderfully)... unless the prices crashes back to reality.
As an interesting side note... over the past 20 years, IPO's have had an average annual return of less than 5%... and that only counts the ones that have made it!!!!
Not the best place to be investing... I will go with the proven ones any day.
Sorry... they don't do F-C-F-S.
If they have a higher interest, they revert to a lottery format, kind of what is outlined here:
Starting on June 8, 1999, we will accept Conditional Offers in all public offerings for at
least two hours, longer when the number of shares available allows. Shares will generally be randomly allocated among interested customers after a review of applicants' holding records in prior public offerings.
If they did do F-C-F-S, I would have had some, since I got into work Monday, saw the "Go Now" by constantly hitting reload and confirmed within 30 minutes last night when they asked for confirmations.
E-Trade lots out a minimum of 100 shares to all if available -- if not, lottery. After all shares alloted, if enough, people who wanted, get another 100 -- if not, lottery. So On... (at least that's what I was led to believe long ago).
Time to crush some proprietary-interface board makers.
Really? I didn't think E*Trade had the F&F deal going...?
----
But Dell sells to a much larger market - those who are just getting into Linux. VA can only sell so many machines to the Linux early-adopters. Dell will eventually win this battle.
https://trading.etrade.com/cgi-bin/gx.cgi/AppLogic +IPOTombstone?Message=IPOAlloc:1
Although Canadians were not allowed to directly invest in this IPO, if they used an address of one in the United States they could still invest. I am not sure of the legality of doing such, but I do know it was done and did work out fine. However dealing with the 3 day terms is not gonna be easy from canada as a wire transfer takes too much time from canada.
I can't say anything about state taxes, but federal-wise, if you sell any stock - brian j. pardy / posterkid@psnw.com (account deleted, yay)
-bri
Fuck you, Mandrake is an extremely busy man, and makes every effort to reply to mail that people send him.
He and Raster are doing exactly what they want. They have a vision of what they think a cool desktop is, and VA is supporting their creativity. If you have a better idea, feel free to run it by them. They're always interested in ideas and feature requests. But calling the desktop shell plans monolithic is just indicitive of how poorly informed you are, a slam better reserved for something like StarOffice.
Neither one of us had very "high profile" projects, yet we were still invited to the party. I think this says a lot for VA Research if you ask me. They picked a few big names (from the KDE, GNOME, Gimp, GTK+, etc [see point #1 in their selection method] ) and a few of the not-so-big that still make up what the Linux community is all about. It's just nice to see that even though we don't have our projects highly visible, we're still recongized (in a small way).
I dunno, I just think it was pretty cool of them. If only they would have emailed me the letter a bit sooner...:)
Bzzt, sorry... VA doesn't make "big expensive monster computers". When they make something like a Sun E10k or the new Compaq Wildfire, then we'll talk...
thanks for playing tho...
http://gammatron.weblogger.com
Take THAT Martha Stewart!
sure I get it, but things are out of control - it's all too speculative, and all of the IPO daytraders who don't even know which way is up are just getting their news from equally misinformed financial analysts or tech journalists (read: non-techies) who spend all day reading slashdot to look for good tips to give to their customers/readers
Nah, just richer and more annoying.
Speaking of names... Does anyone know where the "VA" comes from ? Is it initials, like V? and Augustin ?
Not a bad thought, but I'll need to make a bit more than $20K to consider that. :-)
Moving to Mexico would be *really* cool... aaahhh.... mmmm....
Why is diversity a good thing, other than the fact that every liberal says so?
You know, I'm not a market expert either, but I don't think the bursting of the tech bubble will have serious economic consequences, except for individual investors who go out and buy yachts and multi-million dollar homes on the basis of all this paper profit. Yes, VA Linux has an $11 billion market capitalization. That will, at some point, collapse back to a reasonable $500 million - $1 billion market cap. That won't hurt VA systems, it won't hurt the overall economy (much) as it is a miniscule fraction of the GDP, even the whole speculative tech sector (.com's and linux specs) is but a small part of GDP. The people who will be burned is those who have thrown any significant part of their own assets into these. Unless you're on margin, you can't lose more than you bet. If you bet the farm on VALinux and don't have most of your money in a diverse portfolio of stocks, bonds, real-estate, and cash, then you will lose the farm. And you'll deserve it too.
Imagine if you had bought Dell stock when they went public.
Actually.. it is not as impressive as you think.
Dell went public in 1988.... for four straight years after their IPO, Dell stock languished without making any real gains.
In fact, in 1990 it was trading at 40% less than what it IPO'd for.
Would you have been able to hold onto it for that long after losing almost half your money after over two years?
It is never that great to get in on an IPO at the ground floor. Dell is a one in a million company where it would have eventually paid off. Get in on a company when it is established, has proved it knows how to make money and trades at a reasonable valuation.
That is how you make money in the stock market.
It's my opinion that the VA Linux stock
is terribly overpriced. The fact is,
VA Linux is in a very competative marketplace
and their competitors (IBM, Dell, Compaq,
Gateway, etc) are better poised to capture
the Linux server market, should they decide
to.
Let's look at what VA does:
1) They make Intel desktops and servers
2) They produce a value-added linux distribution
that's tuned for their equipment, which generally
consists of widely available PC hardware.
Now the problems with their business model:
1) Their Intel desktops and servers are hardly
unique or exceptional. Having hands-on
experience with VA Linux equipment as well
as Dell, Compaq, IBM, and Gateway equipment,
I can say that I think VA Linux has a long
way to go before they catch those guys when
it comes to the quality of their servers.
Desktops may be a different story because their
quality varies widely from producer to produce
and even within product lines. On average
though, I'm not impressed with the quality of VA Linux's server hardware.
Additionally, Dell and the other big boys buy
their hardware in much larger volumes than VA
does. VA cannot hope to compete with them on price any time soon. If you don't believe me, price out a
two CPU rackmount server from VA and then price
one of IBM's models out and see who comes in cheaper.
A lot cheaper.
2) Their value-added distribution is not that "value
added". Since their tweaks to the kernel are all
open-sourced before they are sold, they are openly
available to their competition. It would not be
that hard for one of the bigger vendors to put
together a server based on well-supported hardware
and acheive the same performance that VA is getting
out of their boxes. In fact, it has already
been done.
I can see one of the big vendors getting into the Linux
market "big time" within the next few months. Essentially,
all they would need to do was hire off some of the kernel
developers out there and financially back a major Linux
software project like KDE and they would already be ahead
of VA Linux. Remember, these large manufacturers are
buying their components in much larger volumes than VA
Linux and can blow VA out of the water on pricing.
In conclusion, I think VA Linux is a really great
company, boldly breaking into a wonderful new market
but they don't have the garaunteed market that stock
traders seem to think they have.
Other items which need to be addressed:
Contact Manager got some vy good ones in windoze.
Financial App aka quicken like thing.
Convince others to port get Adobe, and Macromedia to port at least their webcentric tools, and of course photoshop. (gimp is nice...but if we want to get some of the web designer user types we'll need the tools they loved ported.)
I also put in for 200@$30 and got none, and I know a couple of other people who put in for 100 and got nothing.
I've held on to the RHAT that I got from E*Trade in the F&F program, so I shouldn't be on their IPO blacklist.
If you poke around enough on E*Trade you'll see that, while they allow "regular" customers to sign up for IPOs, ther e is a whole seperate lottery for their "Platinum" customers.
AND, if you don't get shares selected for Platium customers, you STILL get to participate the the second lottery with everyone else.
Basically it seems that E*Trade really only gives IPO shares to their "best" customers, just like Schwab and everyone else... they just let their regular customers sign up for a random shot at the "crumbs," if any are left over...
----
Life if possible, art at any cost.
Yeah, but how many companies can claim
maddog as an Ubergeek?
The thing the VA has going for it is
its people.
Public $30/share; Underwriting discount and commissions $2.10/share; VA Linux gets $27.90/share. $2.10 didn't look like a lot to me until I saw that out of the total $132,000,000 to the public, the underwriters get $9,240,000. So no matter how big it jumped on IPO, LNUX only walks away with $123mil. Then again, IPO jumps are mostly based on fads of the public. People liked disco at one time, too ... One of their filings has 14 pages of risk factors alone. Though I still wouldn't have minded being in on that one.
It's because of Linux "fever". I was watching CNBC at lunch and for all that talk I never once heard the words Open Source, go figure...
+&x
I had RHAT up until Monday from the IPO... still got zilch.
Damn, I wish there had been a way to find people
like you before the IPO, I woulda lent you the
money in exchange for half the profit.
That's capitalism at it's purest.
We are talking PE and ROE and stuff like that, not only market cap. It is okay to have trillion market cap, as long as you have the profit (or market expansion power) to support it. We are already talking PC sales slowing down compare to mobile unit like cell phone and PDA ... what make you think VA has market expansion power that big?
Doesn't anyone get it? VA left some $270/share on the table!
People at VA own most of the shares of VA. If it had IPO'ed at $300, they might not have even sold all the shares. If you're VA, sell the IPO shares for less than the expected short-term market value, and the feeding frenzy may raise your remaining shares. Then use your shares to fund purchases of companies that actually make money. (At least that way when it returns to earth, the stock drop won't hit anyone too hard.)
Ooh, a sarcasm detector. Oh, that's a real useful invention.
Brand name recognition is DELL, and Dell is using RHAT to get the missing brand name recognition ... which eventually it doesn't need.
Traditionally stocks have commanded a risk premium over fixed income
securities such as treasury bonds of 6%. So one would expect the
value of the share to be a bit less than its amortised projected
future income. One sign of irrationality in the market is that one
pays a bit extra to carry this risk these days...
I gotta think that that $299 first trade was some e-trade newbie who didnt know what a limit order, meeting a machine trader with a decision rule that said, "IPO, no trades, lets try 10*X-1 and see if there are any hits".
Now that andover.net has IPO'ed I am working on creating the CmdrTaco Personal Wealth Clock.
Your article is interesting, but your premise is flawed.
At market close today, the market cap of AMZN was $35,314,053,00.
At the same time, the market cap of LNUX was $9,925,500,000
So they're not valued the same. AMZN is valued almost four times higher.
-JTB
People think its going to rise foreever.
Some unexpected event spooks the market.
Negative pschology spooks the market for years.
Its going to happen some day. Enjoy the ride
until then.
exactly.
"Cause there's 40 different shades of black, so many fortresses and ways to attack, so why you complainin'?"
NOPE... put in a request for 100 and reconfirmed after the price up but didn't get anything. In fact, I don't know ANYONE who actually got shares from E*Trade. Is this a scam or what? They had the offer up on their page for 2-3 hours max that night and you'd think there would be people who got some shares... WTF?!?
I notice that LNUX has dropped from $250 to $239, after the close. Can someone explain how that happens?
You know, people laughed at me in August when I said VA's IPO was going to be hotter than Red Hat's. Even I didn't know how much: I was off by a factor of 2 on the limit orders. Waaaah.
:P
Anyhow, congratulations to ALL the people at VA.
Have yourselves a party. A quiet party.
And to all the people who laughed,
_Deirdre
I think it's all in the ticker and in the company's new name. Calling themselves "VA Linux" and LNUX is causing the unwashed masses to think they are Linux. All the hype that they've been hearing about? Oh, that's where this Linux thing comes from. This company called VA that makes an operating system called Linux. They must be the next Microsoft.
Was it wrong for VA to choose a ticker symbol that suggests that their company is all about linux, when actually their company is all about hardware? Perhaps.
Dell Computer is not considered to be a Microsoft Windows company. They're a hardware company that made a choice early on to install the Operating System that they believed in. Now they're also choosing Linux, but that's pretty recent.
VA is not Linux. Red Hat is much closer to "being" Linux than VA is, and they're certainly not Linux either. Linux is a group of people all over the world, and they can't be bought and sold on Nasdaq or anywhere else.
I'm done ranting, I think. If you made it this far, you might as well moderate my sorry ass up :)
RP
there are two types of sell you need to think about -- "market" or "limit". Just tell the broker which you want.
A market sell means to sell the stock at whatever the market is currently trading it at -- this may be higher or lower than your information, and it's intended for folks who want to cash in as QUICKLY as possible.
A limit says to sell at a certain point -- say, $250. That way, if it dips below $250 a share, your broker will sell it immediately. this is intended to keep you from losing value if the price drops. But if it goes up to $300 the broker doesn't sell. Then maybe you call later and raise the limit to $275, so if it drops down to $275 it will sell.
Recursive: Adj. See Recursive.
(Or was that Transmeta's experiment? :)
Probably, VA are going to start looking into serious mass production (which'll cut their costs) and/or expanding into the high-end Workstation market, which is staggering around in a drunken stupor, right now.
P.S. If you read my earlier post, on VA thinking they were worth at least as much as Red Hat, I was right! They came out of IPO only inches away from Red Hat's -current- stock value.
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)
It would be a very good investment, would allow the Troll Tech guys to make some serious money, and would finally put an end to the pissing and moaning about the license.
I believe you are thinking of Redhat labs, which has 7 people. This is a somewhat more independent subset of Redhat.
Actually, they tried really hard for us to get in, apparently, if it was a small number (~50) it would have been okay, but because around 200 of us Canadians were developing stuff, a lot of people got letters and our brain-dead government didn't allow the trading.
----------------- "I have a bone to pick, and a few to break." - Refused -------------------
Waited in front of my computer for the last two days hitting Reload for nothing!! All I received was a letter that I did not get a allocation. I tried calling E*Trade to get an explanation and all the info I could get was that they were randomly distributed. When I asked how could they be random if their website stated clearly that if you sell shares before thirty days after IPO you ability to take part in IPO's would be affected. His response was that it didn't matter. When I asked him why E*Trade states that is does he wouldn't give me a direct answer. I think there is something strange going on here. I think E*Trade should be investigated. Too many people are spending alot of time with research on prospective companies only to get nothing.
I was watching CNBC when a small blurb regarding VA Linux Systems came up. If it closes at around $250 (where its hanging out) it will make VA Linux the most successful IPO in history. How cool is that?
Of course it matters. Stock markets are all about bluff, double bluff and guessing just how irrational other people are going to be.
There only has to be *the possibility* of someone buying for a stupid reason, and everyone else will buy to get in first.
Then you might as well buy, because you know all the rest of the lemmings are going to bid the price up even more.....
Honestly, it wouldn't bother me at all if people got burned by this. This is just the same as playing the lottery or any other 'get rich quick' scheme where nothing is actually *earned*.
Unfortunately, though, the effects of building our economy on a foundation of sand will have a disasterous impact on all of us.
So it goes...
When I contacted E*Trade to get further clarification on their allocation procedure they told me they couldn't give me any information, nothing! Not how many shares, indications of interest, or by how much I missed it. They only told me everyone is chosen "Randomly" by the computer. Yeah right!!!
Let's assume you got the 140 F&F shares and sold them at 300. That's a net $37,800. While it's not chump change, it's far from being rich 8).
Too bad you can't short an IPO until a month later, those of us who didn't get in on the IPO could have made a ton shorting when it was $300, there's no way VA Linux can keep this price.
I completely agree with you. Although I tried to get in at 100 (fat chance) I think in a month or two I just might. 300 is WAY overpriced for VA Linux, and I think I myself contributed to that.
:(. I'll keep it though. I like saying that I own /. ;)
I was extremely impressed with who was employed there and I liked the way they did business. When RedHat came out I said to my broker, that I wanted to wait for VA Linux. Boy was that a mistake. But what I didn't know was that I started spreading the word about this company. And so did others. So with RedHat doing extremely well, it cause anything to do with Linux to go sky rocket. And with me being one of the "techs" in on the business for my broker, he started recommending this company without even knowing what it does. It also seams that anything to do with Linux is red hot and overpriced. This I believe is not a good thing. Although if we can use this money to improve things maybe it is a good thing.
My biggest fear was that VA will become so big it ceases to be a good company. The people involved won't know what to do with the cash. The only thing that I can think of is to follow RHAT and start buying other companies. This way you can actually aquire more revenue.
Anyway I also jumped the gun and bought ANDN (Andover.net) at the opening price (84.5) and it just dropped from there
Steven Rostedt
Steven Rostedt
-- Nevermind
You would be a fool to get out of the market before the year is over. That is market timing, and not one single person has ever been able to do that succesfully.
If you are invested in the internet bubble, you should be out of it anyways... find yourself some quality growth companies at reasonable prices, there are plenty out there. Hell, if you want help... write me.
The market has come bounding back after every single market crash or correction within 10 years! Ride it out... you will be very happ you did.
Do you think Warren Buffet will be leaving the market?
For those recommending to put your money in oil or gold... that is just ludicrous. Those markets can be just as volatile as the stock market. Interest rates can kill them. The difference is, over time, they do not appreciate... the stock market does.
I recommend putting money in BEFORE the year is over, in an attempt to take part in a possible influx of money when the year is over and the world does not come to an end (we hope). Raise a little cash or place some limit orders so you can catch some quality companies if they are riding any waves down.
buy gold, platinum and silver.
remember the maxim:
buy low sell high.
President Clinton announced a budget *surplus* some time ago. How come the US treasury still reports a higher US national debt every month?
hard to believe? take a look:
http://www.publicdebt.treas.gov/op d/opdpenny.htm
I do not believe Dell, IBM, HP, SGI, or Sun would ever find it "worth it" (to use your own words) to pursue Linux as seriously as VA. They're too used to earning their profits by controlling the customer and all of his (her?) support options. Linux is anti-control.
VA Linux computers may be of interest to only a small group of people, but the interest level within that group is compelling indeed.
30$ was the IPO price, it opened at 300, you had no chance of getting it at 30$ as there were no shares avail for that price once the IPO closed. as usual the corporations screw the little guy to make easy money.
sent to E*Trade customer service, see also:
http s://trading.etrade.com/cgi-bin/gx.cgi/Applogic+Ho
E*Trade:
What is the percentage of E*Trade's IPO shares that are allocated to "Platinum" customers, including both the Platinum-only lottery and the allocation to Platinum customers in the "regular" lottery?
What I'd like to know is, do "regular" E*Trade customers really have access to IPOs, or is E*Trade just like Schwab and more traditional brokers who only allow "premium" customers to get IPO shares.
If all shares typically go to your Platinum customers, then it is false advertising to say that regular customers have access to IPOs.
The IPO Center FAQ and Allocation notice are also false when they say that shares are distributed randomly among those who have placed conditional offers.
It is very interesting to note that the "Platinum-only" lottery is not mentioned ANYWHERE in the IPO Allocation Process document, the Allocation Announcement document or the IPO FAQs.
At the very least your web site is misleading your customers into believing they have the same equal chance at IPO access as everyone else, when in reality it seems like all of your IPO shares are probably allocated to your premium customers.
Thank you,
Baba Buehler
----
Life if possible, art at any cost.
In traditional enterprise computing the vendor is your sole option for support because only your vendor has rights to the source code for the system software. Linux is different because you have the source code, and you have more support options (including appealing to the internet public at large for help). I'm sure you've been told this several times but maybe you haven't thought it through yet. Again, not everyone needs this level of control, but for those who want it it sure sucks that the traditional vendors won't offer it at any price!
Maybe one day Compaq or IBM will form a division that specializes in Linux. Until they do, the customers that need control over their support options will continue to find VA Linux computers among their only choices.
We've heard from a lot of people who recived lucrative friends and family shares for thier relativly modest condtributions, but I wonder what about the real giants of the movement. Have Linus, Alan Cox, RMS, etc. shared in any of the rewards?
Why is this a good thing?? It's shit like this that's gonna make the stock market die. I mean.. I like VA and everything.. but there a computer reseller.. what's so special about that? Any one who buys at that price is insane..
I wonder what would have happened if they OpenIPO'ed? Personally, I would have bid the IPO shares upto $40-50 range, figuring that the value would stabilize at least over $100/share when I could sell them.
i cant believe what im reading, does anyone actually think VA is worth this price?, of course its not, then WHY is it up there?. Large multi-nationals invest their money knowing they will get a monster return, the little investors have absolutely no chance as you would have known if you called CS, theyre only interested in institutional investors, so what does this mean, well it means the institutions invest a decent aboumt of money to all their buddies, the stock is inflated SOMETHING STUPID!, and the little guy is sitting there like a dick buying VA shares at 300 a pop while the institutions are slowly selling them off bit by bit, laughing their asses at us fools, as you know there is no lock period for institutions, but there is for private investors, i believe theres a legal proceeding starting to prevent this kind of crap happening, but hey its great if you can get in on it, only thing is you cant.VA's only saving grace is that it gave shares to developers, IE their life support. for a person whos been using Redhat and SuSE for a long time now, i know i wont have a chance of getting in on SuSE's IPO, once again the little guys who helped make the company get right royally jabbed in the ass. :)
I'm asked them twice before about the allocation of IPO shares. The first time a rep wrote back saying it was randomly allocated. However, he "forgot" to tell me about the Power E*trade traders who get priority allocation. When I wrote back about this "oversight", he admitted that the Power traders had a block of shares reserved for them (as a few others have noted). So, it's my guess that the Power traders get the lion's share (say, 75% or more) of E*trades measerly allocation and the rest of us get the crumbs. BTW, you have a better chance of getting an IPO issue IF it's a lackluster one. I know. I tried for some of them and managed to get an allocation. I still try for the hot issues but have little hope it will be fairly distributed. I even suggested that the people who got a previous hot issue (gain of 200+%) be barred for a period of 6 months so that others have a chance at future hot issues. Well, you can guess what E*trade thought about that suggestion.
After much head-off-wall banging today, I have now entered a state of semi-denial. I received the offer by e-mail... but it was sent on the evening of the 2nd of December. Which meant that once the e-mail had flown over the water to the UK, it was already December the 3rd - the deadline for all the interest forms to be returned!
Is this some way of holding back shares? What was the point in sending me the e-mail in the first place?
Rough math told me that an investment of a mere £750 would have returned £18,750. Can any UK 'winners' confirm this?
Looking for that very faint, rather tarnished silver lining, at least I can feel the priviledge of having VA Linux recognise our OpenSource project as being of some worth...
insignificant sig
Unfortunately, the market has gone crazy for linux. Just about every company that announces a linux compatible product gets a 300% boost in its stock price f/i -- a $2.5 stock that skyrocketed to $15 in a day because it announced a linux version of its software.
Eventually, this whole thing has to deflate. I wonder whether it will cause businesspeople to dislike Linux afterwards...
Someday the boomers are going to retire and start cashing in their 401(k)'s. That's the time to worry about the bottom falling out of the market. Right now they're furiously saving for retirement. Is it any wonder that stock prices are going up (independent of the current Linux fad)?
Avery
Editor, ScowlZine
Avery
Editor, ScowlZine
"A quarter-pound of hostility and a pickle spear on the side"
ISOL.OB 2:19PM 2 5/16 +1 5/16 +131.25% 441,100
Fri Dec 10 ISOL.OB 1MAGE Software Announces Document Imaging for Linux - Business Wire
-----------------------------------------------
how much bandwidth has been wasted by this sig?
Unfortunately, the market has gone crazy for linux. Just about every company that announces a linux compatible product gets a 300% boost in its stock price f/i VONE -- a $2.5 stock that skyrocketed to $15 in a day because it announced a linux version of its software.
Eventually, this whole thing has to deflate. I wonder whether it will cause businesspeople to dislike Linux afterwards...
Seems like you could ALSO use a lesson in stocks. If you think that VA sold every share you're very mistaken. Most companies (admittedly I haven't confirmed this from VA's SEC filings but I'm sure someone else more knowledgeable can confirm this) retain a reserve of their stock as a war-chest of sorts.
IPO'ing companies make money in two ways. They make some immediate money (at a lower price) from the direct sale of the stock @ IPO price. In this case, VA made $30.00/share.
They also "make" money in that they retain shares of stock which (after IPO) have an increased value. That value is useful for Secondary Public Offerings (if needed) but more often for acquisitions. (e.g., we're buying your public company, and we're going to do it by swapping your stock with our own at some determined ratio). The higher the value of the company's own stock, the lower that ratio is.
Is this case, VA could, right now while the fire is hot, acquire companies using stock swaps. (There are probably SEC requirements that they wait a certain time post-IPO, but that's the gist of it).
For classic examples of this, note that Yahoo has almost never (I don't want to say never, but I can't recall any time they did it) paid cash for a company. They simply dip into their stock reserves and use that to acquire companies. VA could do the same thing.
D
It's been headed down from $300 to $220 last time I checked. Take a look at the day's range though: $125 - $320. Now that's volatility!
I dont' get it. What is the difference between what a company is worth and what it will be worth in the future? I thought the difference was discounting. Why wouldn't the curent worth be equal to the present value of its future worth?
you need to sit down and do a lil reading mate
That's an absurd comment. Everyone knows that stock prices these days aren't driven by the price of the company... they're driven by supply and demand.
That's precisely my point. The intrinsic value of the company has nothing to do with it. The stock price is driven by confidence in the market. When that gets shaky because of perceived risks, the bottom falls out.
Consciousness is not what it thinks it is
Thought exists only as an abstraction
VA got their money from IPO sales. That's it. VA doesn't see a dime of higher priced trading later. That's now between bidders and buyers.
An update also on yahoo: http://dailynews.yahoo.com/h/nm/19991209/bs/market s_valinux_1.html
Sometimes the bears think a stock is too lofty and all start shorting the stock...essentially borrowing stock now and hoping to pay back later when it is cheaper. However if too many people do it, there is not enough time for the shorters to exit the stock so if there is any increase in the stock, they get worried and start covering their shorts by buying shares. This demand drives up the price even more resulting is a positive feedback where more shorters cover their stock driving up the price even more!
I glad to know that I am not the only one who put up the $$ for 100 shares (selling my Andover shares yesterday that went up another 20 points after I sold them) and got rejected from the IPO with no explaination except... high demand. And all I wanted to do was pay off my college loans!
At the time I ran the model (one year ago... almost to the T), Amazon.com was comparable to VA Linux... sorry for not making that apparent.
amazon was grossly over-priced then, and it is today... even though tons of people have made a lot of money on it... the vast majority are going to lose their shirts. I just do not know when it is going to happen.
Because you actualyl own a share of the company with the stock, the price has to correlate with the business at some point... it has for the past 500 years... no matter how much the internet, biotechnology, computers, TV, cars, the radio, spices and tulips change the world.
Well, I just got the account alert that told me what I suspected already..that I didn't get allocated any shares due to "high demand"
I put in a limit order at $70/share this morning, but it never executed when LNUX started trading. I guess the asking prices were way above that.
Shouldn't this be under "The Almighty Dollar"?
FYI, a limit is "this is the limit of what I am willing to spend this equity, buy it for me at the best price you can, up to NNN dollars", or "this is as cheap as I am willing to sell this stock for, if you can't get this for it, don't sell it". The type of order you are describing (where if it dips below N you sell as close to N as possible) is a "Stop" order. You are trying to stop your losses.
If VA threw a dozen developers behind mozilla development, that would get things up to speed rather quickly. This is so important to not only the linux community but the entire UNIX community. I wish Sun would do the same.
... c'mon Apple, Real, Macromedia??? No excuse.
And, we need GOOD versions of all the major plugins. The only linux plugins that don't suck rocks are flash and acrobat reader. Real player for unix is pure schlock. If we want to push linux on the desktop, we need plugins for the major media formats.
If there's an audio/video link on CNN.COM, linux needs to be able to decode it with a plugin in the browser without building extra stuff and hacking plugins.
My short list of plugin wants for linux/unix
- good, recent decoder for all versions of RealAudio/Video with all codecs and compression supported
- modern quicktime plugin support and support for all quicktime image formats.
- macromedia shockwave support
- windows media player - if people are posting content with it, we need to be able to view it.
C'mon, what's taken so long for the unix plugins? I can understand Micrsoft not porting their player in hopes of slowing their marketshare loss, but
Fix it!
ARRRRRRRRRRGHHHHHHHHHHHH
I got the Red Hat letter...was like 2 days
too late in gettings started with the Ebay
acount setup...missed out.
I got the VA letter...but no cash to take
advantage....man.
I am definitly happy for VA...great company but
damn.
"I opened my eyes, and everything went dark again"
It stands for the surname initials of the founders:
James Vera
Larry Augustin
z
How about sourceforge.net? That place really does rock.
Thanks.
1. Look for a solid company with a solid product and solid profits.
2. Wait until stupid investors leave the stock in droves because of a trivial problem (like 1 or 2 cents lower than expected earnings).
3. Buy up the stock and hold it.
4. Wait until the next Macarana (sp?) craze hits the stock's sector, causing the stock to go through the roof.
5. Sell your stock, making money off of all those stupid day traders.
And, most importantly:
6. Don't get greedy. Set realistic goals and try to ensure that you achieve them.
Disclaimer: I don't know anything about anything. If you follow my advice, you are on your own.
It's all going to go belly up some time in January or February.
:o/
Any dealer with a brain cell knows that certain sectors such as internet services and certain software stocks are massively overvalued. They also know that nobody is likely to bottle out just yet because, well, why should they? Thus they continue piling into hi-tech IPO's and anything with the trendy new open source label because they know from recent past experience that they'll make a quick killing.
At the same time they also know the market is expected to undergo occasional spontaneous corrections because it's chaotic and therefore unstable.
Brokers might be prepared to sail pretty close to the wire, but the key is to get out before everyone else does, so they're constantly sniffing for clues that the party is about to end. All it takes is for some news item to make a few dozen big brokers nervous at the same time, and they'll all start dumping stocks. And when one market starts this process, the others follow as the world turns.
Market falls are usually triggered by bad news of some global importance, but when stocks are overvalued it often appears that market reaction is still well out of proportion to the initial trigger. I'm thinking particularly of the 20% fall of the FTSE-100 (I think the Dow and the Hang Seng suffered about the same) during just a couple of days in 1998 because of a sudden loss of confidence. The real reason IMO was that a correction was simply overdue and somebody decided to get a head start on the others which got the ball rolling.
It's almost as if brokers in any given market share some sort of herd instinct. This is an inevitable aspect of the mediocrity of most dealers. Assuming that you don't know the market better than 90% of your fellows, the best way to keep your job is to be sure that you're doing what everyone else is doing even if it's against common sense. In other words, look out for trends and try to be one of the first to follow but don't get caught out there all by yourself. So they'll continue milking the cow for all it's worth until they begin to start feeling uncomfortable as the realisation slowly dawns that the cow they bought is little more than a mirage.
Surely many brokers must realise that time is almost upon them now. If so, many of them will be looking for a plausible excuse to switch strategy early next year. Of course they can't afford to just sell everything without good reason. But just about any bad news at all should provide a good enough excuse for the more cautious to ease themselves out of the game.
Fortunately for them, the media will be expecting a few Y2K glitches to hype up into front-page scare headlines. Now some minor Y2K cockups are inevitable even in those countries and corporations who dealt with the problem, and there are plenty of countries with significant economies who never really got it together. And our economies are all pretty tightly linked these days. So I believe those twitchy brokers will get their excuse.
When they do react, it won't go unnoticed. Trends are particularly easy to spot in electronic order driven markets, you just watch the online order book. So once people notice that the smart money is moving out, the trickle will rapidly become a flood.
I could be dead wrong about all of this but I feel it in my bones that a major market correction is on its way. I just hope the banks don't go down too like they did in 1929. If it's not just technology stocks but everything that's overvalued then we're in even bigger trouble. And that shortages stemming from interrupted supply lines (when producers and distribution companies find themselves paralysed by Y2K breakdowns) don't result in hyperinflation.
I'm certainly going to liquidate what stocks I have before the new year. The problem is, there's nowhere I can think of to put the proceeds that's immune to all of these risks
Consciousness is not what it thinks it is
Thought exists only as an abstraction
People who were in on the IPO won't get burned, but anyone who's buying it now at $250 might be. Of course, that's what I thought about RedHat, and it's gone nowhere but up.
The trick, of course, is to sell it just before it plummets back down to a reasonable price.
-- Ryan
What exactly merits someone to get "the letter"?
I realize I've never been nor ever will be a candidate for such (which is quite alright with me), but I've wondered this since the Red Hat thing. I figured with Red Hat, it meant you'd contributed somehow (significantly, I'm sure) to the Open Source movement, but.. with VA? Same thing?
Insert mind here.
Well, I got The Letter, but I was unable to get in on the IPO because I happen to be Canadian. Bummer - I could have been CAN$30000 richer right now... *sigh*
Isn't there some way to make OSS IPOs work for those of us that live in countries with securities laws that are more restrictive than those of the US?
Still, this is a good time to remember the best investment strategy is to invest for the long term. These stratospheric valuations can't last forever. At least, thats what I keep telling myself to make myself feel better.
Everyone who rants about how overinflated the market is are the ones who don't own any overinflated stocks and are simply jealous of those who do. It's as simple as that.
Rob stated that any meta-moderation that contains all or almost all "unfair" marks will be discarded, rejected, ignored, and thrown away. Just to prevent abuse like yours.
Can anyone verify if db is still in the process of confirming allocations? Haven't had any response to the email I sent yesterday morning yet, and can't get through to them on the phone.
Guess that means they probably are still going, but would like to know for sure...
The IPO was a scam. I put in an order for 500 shares. Got -0-. Unless E-Trade discloses how many share they have to allocate and exactly how they allocate the shares I am going to close my account.
If not, seek help now, there is still a ray of hope.
Then again, probably not.
Show us some proof of this "Russian mob money" or shut up. From the talk of "high, early turnover"
I'd have to guess that you are a follower of the false prophet Ockman the Absurd.
It's that or you didn't get the opportunity to participate in the IPO. I'm holding until next
week, hopefully I'll be able to replace my clunker
car and plan a nice honeymoon. Wonder if I can get some VA tshirts to wear in the carribbean.
A loser.
Whether its all built on vapor or not, people have made mountains of cash simply by gauging tech trends.
You can pout about it all you want, but you're sticky adherence to fundamentals isn't going to juice your account too much.
Have fun tending your Sears stock.
Yeah I'm sure that's why Cobalt switched to ia32
A stock can't go that high without someone evetually being left "holding the bag" as they say.
You answered your own question. Potential for future growth, and a perception that Linux is the next big thing, is quite enough.
There are a lot of people trying to invest a lot of money in something that will reap them a profit. Among the best opportunities for growth they can identify are:
Internet infrastructure.
The next PC operating system after Windows.
Linux fits both those categories: It already drives a big chunk of the servers on the web, and everywhere they look are signs that it has become the OS of choice for future growth.
VA Linux is an even better fit to both categories: An established seller of Linux-driven servers and clusters. What an opportunity!
And why do you think they're "Stupid"? Don't YOU believe that Linux and the Internet are taking over a bunch of very lucrative markets? If that's true, doesn't it make sense to buy in?
And if you bought in early and the crowd's attention then pushes the price beyond all reason, doesn't it then make sense to sell, take an "outrageous" instant profit, and use your puffed-up pile of money to buy in on the NEXT Linux/Internet opportunity?
Investment is a market. Markets are partially a gamble. (They call that "market risk".) Ownership is a bet that what you own will be worth more than you paid for it. Why not buy what you expect to be valuable, thus betting on the horse you expect to win? Once others decide it is valuable and offer you more, why not sell, collecting your winnings?
Sure, sometimes people get carried away and offer a whole lot more than makes sense. But they do that for used cars, too. Value is defined as what other people will pay.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
I've seen a lot of mis-information posted, so let me try to clarify a few points. Please bear in mind that I do not consider myself a financial expert; I'm just someone who has traded stocks and options via E*Trade for the past five or six years.
As far as my receiving an allocation of shares, that is pretty much the luck of the draw. I've put in for dozens of IPOs through E*Trade, but I've only received allocations in 4 of them up to now: ASDS, IMAN, RETK, and LNUX. They've all done well, although LNUX has easily eclipsed the other three (so far). I take E*Trade's admonition to "hold for at least 30 days" seriously, so I haven't sold any shares in any of them yet, though I expect to sell IMAN and ASDS shortly; I will probably hold on to RETK for the long term, as I think it has excellent prospects.
As far as holding on to LNUX, I'm sort of torn. I hope to hold it at least through the 30 day period, not only because of E*Trade's "rule", but also to avoid the tax consequences this year.
Is LNUX, at nearly a $9 billion market cap based upon Friday's close, overvalued? Yes, by so-called "traditional" methods of valuation. (BTW, RHAT has a market cap of about $18.7 billion, Amazon.com of about $33 billion, and MSFT of nearly $500 billion.)
The problem is that the value of a stock is really a function of supply and demand, that is, how much is anyone willing to pay for it. Right now, anything even vaguely related to Linux is hot. I expect (but, of course, I can't possibly know for sure) that Linux related stocks will stay hot through at least the middle of January, and I further expect that there will be a lot of new money coming into the market in January (the so-called January effect). So I think LNUX might be "safe" to hold for 30 days. That is, it might lose some more of its value, but after 30 days I think it will still be selling at significantly above its IPO price. If I'm wrong, and I see that LNUX begins to plunge, I might re-evaluate my decision to hold on for at least 30 days.
Regarding the stock price and how it helps the company, there are a couple points to make. First of all, the company only receives money from the initial offering, in this case the 30 bucks a share (after the bankers take their fees, of course). So from that point of view, it was good for VA Linux that the underwriters decided to raise the offering price. The company ended up receiving nearly 3 times as much as they originally expected. On the other hand, the higher price might have prevented some people from getting into the offering.
Does the high stock price benefit the company? No and yes. No, the company doesn't receive any money directly from the appreciated price, but they might at some point do a secondary offering. Also, they can reward their employees with stock options (the way MSFT and many other companies do). This can be a great way for a company to compensate its employees if the stock price continues to climb.
Additionally, the company can use its stock to acquire other companies. The higher its stock price, the more it can "pay" for aquisitions.
--JT
That's $10 billion, if I'm counting right. A little more than half of Redhat, and about 5x SGI.
Corel was up over 30 percent today, to a new all-time high. Maybe if you bought in too late you didn't make much today... but today was a fantastic day for Corel stock.
NO, NO, NO! I HAVE TRIED NUMEROUS TIMES TO BUY AN IPO FROM E-TRADE TO NO AVAIL. THEY ARE MISLEADING AND SHOULD BE FORCED TO CHANGE. MANY OF US HAVE THE SAME STORY. HOW ABOUT THE GUY THAT'S BEEN WITH E-TRADE FOR SIX YEARS AND HAS 4 SUCESSES IN IPO ALLOCATION? DOES ANYONE FIND THIS ACCEPTABLE? I AGREE, LETS CLOSE OUR ACCOUNTS AND WATCH THEIR STOCK HEAD SOUTH
Requested 1000, got 0. I'd like to know how many shares they actually distribute this way.
... I don't care how trendy Linux is, this market cap is just downright insane...
I sincerely hope people don't get burned by this...
DNA just wants to be free...
I'm confirmed for 140 shares at $30 for a total of $4200. I plan to sell 40 shares tomorrow for approx $10000. That money will go into my Deutsche Bank account. Am I then covered for the original stock purchase, or must I send a separate $4200 check to cover my original purchase?
... I don't care how trendy Linux is, this market cap is just downright insane...
I sincerely hope people don't get burned by this...
DNA just wants to be free...
i'll admit to being against commercializing linux a week ago but having got the letter has won me over. I can not wait till the next IPO can convince the public that the company is worth 100 times more than their revenues. woohoo -B
If the price doesn't settle back too much, VA Linux is set to be the bigger first day gainer ever - a dubious honour currently held by The Globe (the URL appears to be incorrect in the Yahoo story).
...j
I put in an order for 100 @ $30 reconfirmed both times, and got nothing. It doesn't seem like anyone did.
Interesting thing: The options have changed. It was originally to be a fixed 100 shares. Now, you get to choose:
- 50 shares
- 100 shares
- 140 shares
I'm not sure why it's 140 rather than the "arguably more even" 150.Mathematical aside: 140 is "more even" than 150, as it is divisible by 4, whilst 150 is only divisible by 2. The more precise term would be that 150 represents a linear progression whilst 140 doesn't.
I have some Red Hat and VA Linux stock (mind you, not much -- I am just a developer who got both "letters"), and I know that it *is* overinflated considering what both companies actually have and do now -- just probably much less overinflated than most of other computers-related stocks. There is nothing to be jealous about -- still no one knows what will happen with them later. Both companies can use this overinflated stock wisely, strenghten their main business and make it a self-fulfilling prophecy, or do the opposite and crash later.
OTOH, I have serious doubt that amazon.com will be able to pull the same trick and become Wal*mart of the Internet, no matter how smart they will do their business -- any attempt of making profit that will justify their price will open doors for competitors.
Contrary to the popular belief, there indeed is no God.
It's funny to see how little Wall Street still understands about the tech world. I give them credit - they did a great job on this stock by finding the word "Linux" in it, which, evidently, adds several billion in value right away. VA Linux does nothing impressive - they build computers and load Linux on them. Well WOW. A small company in Texas you may have heard of, named Dall or Dell or something, has been doing the exact same thing for over a year. So does Compaq. Other entities that build computers and load Linux on them ... well, me for one, and a lot of other ./'ers out there. I wouldn't exactly call VA Linux the greatest thing since sliced bread; yet they posted the biggest single point gain I have ever seen. This kind of gross overpricing is the epitome of what investors are talking about when they bemoan tech stocks.
Don't get me wrong; I really like the people at VA. They bankrole the development of quite a few notable projects (E, for one), which is great. But I think Wall Street investors are complete idiots.
--
"Some people say that I proved if you get a C average, you can end up being successful in life."
I think there is a world market for maybe five personal web logs.
But is this insane pricing cause VA is such a great company? Or is it because investors know that anything with "linux" in the title or company profile will skyrocket on opening? I'd love to see how these stocks perform over time.
I think this is a case of investor feeding frenzy. Linux has a ways to go before the average Joe can use it.
An IPO is all about making money.
It doesn't matter how much profit they make per year, how much market share they really have, how good their actual product is, or how they will last in the long term.
None of it matters because anyone with a significant amount of VA shares (execs, venture capital investors etc) all are a bunch of millionaires right now. Do you really think they care how good a company VA is? The whole point of an IPO is to hype the market into believing that the company is a good investment. As long as you succeed in doing that you've had a successful IPO.
From there they have enough cash (non-liquid mind you) to buy up other companies to make it appear as though they are growing - further reason to keep VA's stock price inflated.
The above post is right on. People justify paying $250/share for LNUX now because of the promise of spectacular future growth. But come on--even speculation has its limits, for $DEITY's sake...
There is a tool to quantify future growth. It's called a PEG ratio. Put simply, it expresses the ratio of a stock's P/E multiple to its projected earnings growth per share. In a fully and fairly valued situation, the PEG ratio of a stock = 1. If it's a lot more than 1, the stock's overvalued, and you should be examining the stock as a short potential. If it's a lot less than 1, look to buy. If, on the third hand, you can't compute a PEG because the company doesn't have a P/E (LNUX anyone???) you're speculating on unsubstantiated future value, rumor, or worse.
Let's look at some PEG's:
RHAT:
Massively negative E value (-1627). Can't do a PEG.
LNUX:
Massively negative E value. Can't do a PEG.
CBLT:
Ooooh. E only -235! Its a bargain! =P
CAN'T DO A PEG!
Does anyone but me see a trend here?
I'm not going to say you can't make real money on these stocks. BUUUT...I won't say you can't make money in Vegas, either...
Let's try not to let fact interfere with our speculation here, OK?
The whole macro trend and issues of accumulation of wealth is very interesting. Cashing in on the 401k's is not likely to be a problem because that will occur very gradually, and a lot of retirees will want to just live off the income, and pass on a lot of the capital to their children. The bigger concern is the shift from more aggressive investments into less aggressive investments that occurs as people go into retirement.
The other wild card in all of this is the possibility that the government will pay off it's debt over the next 20 years. This means that government bonds will become scarce, something that frightens investors because these bonds are such a well established part of the whole investment world, and these are exactly the investments that the boomers will want as a secure place for their money. What will people put money into for security when these bonds dry up? some people think that this will trigger even more investment into stocks, either directly or indirectly through types of stock derivatives aimed at minimizing volatility.
As usual, there is a lot of uncertainty....
Er.. That would be what the NYSE and NASDAQ are for... buying and selling stocks..
How much are ya worth now, son? :)
Same story as everyone else for me. I placed the conditional offer and judiciously checked for any reconfirmation messages. When the price changed I went back and did it again. In the end, same story - no shares. I was okay with the random chance, but after hearing all the posts, I am not so sure things are on the level.
Just spoke with DB. You can sell as many shares as you like, but you cannot place "stop loss" orders. You just have to watch the price and call when you want to sell. BTW, CNBC supposedly gives you up to 25 "real-time" quotes per day if you sign up for their (free) service. I know I am pretty ignorant in these matters, but I am hoping that "real-time" means "not delayed".
No, I understand that. I didn't mean to imply that they didn't retain a huge number of shares. I was more pointing out that the company itself does not get the $250/share of the *shares that went to the public.* They got the $30 from those shares. Brokerage whores got the profits.
Well, check this out... http://www4.zdnet.com/intweek/stories/news/0,4164, 2396099,00.html
A billion dollar company needs to clear after taxes 50 million, not revenue mind you, but earnings just to be even with a 5% money market. But I guess there is a greater fool hoping there is an even greater fool. I wonder how many people even know what a PE ratio is? If earnings and projected earnings do not matter I wonder why we don't just buy and sell space junk.
They can only give out stock options at 85% of market value. Who in their right mind is going to go work for them now?
I hope all the current multi-millionaires really like working for Augustin, because they're never going to be able to hire another employee (short of paying outrageous cash salaries).
I did everything right, confirmed my bid for 200 at $30. And didn't get anything. I realize this is extremely common with an IPO.
Did ANYONE get stock with E-Trade today? Those that got in early the last few days? I would just feel better knowing that someone got something, cause i am starting to think that E-Trade kept them for themselves when they saw the asking prices.
Just keep a minimal amount of cash in it most of the time, and when you get the next Letter, drop $5000 US into it, ready to wire out to wherever at a moment's notice.
The Stop Loss is a form of Limit order, only it acts as a downwards trigger, in that Stop Loss $250 means "when the price drops to $250, sell at the best price you can get". A standard Limit sell order would mean "when the price increases to $250, sell at the that price or higher".
Then there are Options, which I regard as being so speculative as to be gambling, but are really the purchase or sale of a contract to buy or sell a specific number of shares on a specific date. You could purchase an option for 1/15/2000 of LNUX for 100 shares - this would mean that you pay today for the right to buy 100 shares of LNUX at the price specified (say $200) from the person who sold you the option. If LNUX was trading at $150, you would let the option lapse; if it were trading at $450, you would exercise the option, and give the seller of the option $200 per share for 100 shares of LNUX. Which you could then sell for $450. In theory it sounds good, but almost all the time, the only person making money with options is a broker involved in the deal.
To qualify for IPOs, most brokers require that you be experienced enough to purchase/sell options. But I don't recommend it.
Sometimes, by holding a stock, you will receive (gratis) options regardings that stock or in another stock held by that firm. I get those about every month or two, and I usually let them expire, because they're usually worthless from my viewpoint. But, sometimes, they are worth exercising or at least selling.
At this point, you might want to just wait for the stock to engage in the classic post-IPO dip. Look at the RHAT chart and you'll see what I mean. It won't be for $45, that's for sure, but it might dip below $100 if you're patient. Don't wait till Jan 15, 2000, because they should have 4Q results by then, and the stock will go ballistic.
Again.
Will in Seattle
See subject line.
dragonhawk@iname.microsoft.com
I do not like Microsoft. Remove them from my email address.
the rewards are, indeed, handsome.
thank you.
"A limit says to sell at a certain point -- say, $250. That way, if it dips below $250 a share, your broker will sell it immediately. this is intended to keep you from losing value if the price drops. But if it goes up to $300 the broker doesn't sell. Then maybe you call later and raise the limit to $275, so if it drops down to $275 it will sell.
"
I think this may be slightly off.
Market - sell immediatly at whatever price you can
Limit - sell at this price or higher, will only execute if the price is currently at this price or higher.
Stop Market - when the market gets to this price automatically put in a market order
Stop Limit - when the market gets to this price automatically put in a Limit order at this price
HTH
Yes! They can! But right now they are more interested in employing the army of marketdrones then developers ... but behold ... it can be a breaking point for RH and all other IPOs based on Linux (!the word!) without regarding the GPL (Linux) sentiment behind it.
.02$
Just my
bb4now,
PMC
we-go-we-fly
Thanks for the tip. I'll have to check that out!
------
Mr. Low Resolution
Electric Eye wrote: Shit, the brokers are the ones who make most of the money.
And in another comment: Brokerage whores got the profits.
This is incorrect period. The 'Brokerage whores' do not get all the money. Rather all the employees, friends, and family who were in on the deal directly benefit from VA going through the roof. That's why stock options are a big deal.
Of course the underwriters of the IPO and all their big wig clients also made a lot of money on the deal. But that's only fair, after all it's technically a risk to underwrite a company and while you may not understand their jobs they do work long hard hours to make this all work.
Open is refered to when its open for public trading which was around $300, the ipo price was $30.
Does anyone know what the tax on the gains from selling these shares will be? Lets say you bought 100 at the IPO price of 30 and then sold at 270. Therefore selling for a total of 27000. Any idea of what the tax on this would be?
At least they now have the cash to do so :).
I sold my shares as soon as I came into work today since I was having trouble getting online from home. So I got back $35,000 from a $4,200 investment. Not a bad day, though I could have done better if I had sold my shares a bit earlier in the day.
Needless to say, as soon as I get my check I'm getting a new car.
Owning Linux.com adds a little more value to the company. Not several billion dollars worth, but still a pretty good amount.
The Canadian government prevented me from buying my shares. I was prepared to pay $31x100 US, and I would have made, well, around $27,000 US. Well. Thanks to my government, I am unable to participate. I have never been so angry with this country. Time to take up anarchism. Someone find me a rock.
----------------- "I have a bone to pick, and a few to break." - Refused -------------------
I got this email just some minutes ago
(Fri Dec 10 03:10:35 UTC 1999)
-- begin quote --
From: valinux@db.com
To: valinux@db.com
Subject: Thankyou for your patience...
Due to the extrodinary volume we received via email and telephone calls, we
realize we were not able to respond to everyone today. Please be advised
that we are still in the process of confirming allocations. Please do not
worry if we have not spoken with you yet. No qualified member of the VA
Linux Friends and Family Directed Shares/ Community Program will lose their
opportunity to participate in the program due to this delay. We appreciate
your patience and look forward to speaking with you. If you have still not
contacted us to confirm the number of shares that you wish to purchase at
the opening price of $30, please contact us as soon as possible. Thankyou
for your patience.
Chris DiBona and the Deutsche Banc. Alex Brown VA Linux Team
--end quote--
I personally have to say Thank You VA Linux and
friends at Deutsche Bank for your efforts to make
even the impossible real. (And you really seem to
work without any sleep).
For me, the raining money wasn't such important
than the recognition was, I got from you.
And I can feel with all of those Linuxers, who had
contributed but were not in the boat this time.
Perhaps I can give something back to you by
contributing extra horse power to make Linux an
even better OS which gives you fun and
satisfaction to work with.
Go Linux GO!
Nope, didn't sign up. You mean you just put in your email? Are you running a project? *sigh*
:)
----
You obviously don't shit about Compaq or IBM. Both companies make top-of-the line Intel servers kick some serious ass. In the x86 world it really doesn't get any better than Proliant and Netfinity. Not to mention that fact that both companies have a respectable amount of enginering know-how- remember, Compaq bought up Digital and Tandem, and IBM understands enterprise-computing better than anyone.
Is a front end tool for databases a-la Microsoft access. Every small (and large) business needs a database app and there is HUGE cottage industry of independant consultants who do nothing but churn out one access app after another. Think of the power of running headless X stations to access a robust server with a postgresql or oracle back end. Letf face it as good as php/mod_perl are HTML can not provide the same degree of friendliness or help to a data entry person.
I am waiting anxiously for Corel to post Paradox to linux I think it will be huge leap forward if the Linux version is anywhere close to what the windows version was (minus the crashing of course).
War is necrophilia.
What about VA is so unique and wonderful that it justifies this price? Dell does make good machines, and if it wanted to (read: if it was worth it), it could easily whup VA on VA's own field. Same goes for IBM, HP, SGI, SUN, and just about every other manufacturer of high-end PC's.
The fact that these companies *haven't* jumped into this niche should be a warning sign to most investors--despite our enthusiasm for Linux, it represents a teeny tiny market right now. So stinkin' tiny that its barely worth the expense for the big boys to adopt it as a platform. But they *do* see Linux on the horizon, and that's all that matters. Marginal investment into Linux by any of the biggies is a slow and steady method that will allow them to whallop VA if and when the time comes. I really like Linux, but this is getting ridiculous.
Let's try not to let fact interfere with our speculation here, OK?
VA should use the money for hardware development. Like Maxomenos said, Laptop development. They could hire engineers to build a StrongARM based laptop (not a PDA, market too crowded already). This would be designed from the ground up to run linux and still be battery effecient. I sick of all the x86 based laptops only having 3 hours of battery life, and I'm sure a lot of other people are too. But they would also hire some programmers to aid in :- GCC optimization for their CPU, write drivers for whatever hardware they use (and being a hardware maker would give them leverage with chipset makers), enhancing or producing so called productivity applications that people would want to use on their laptop (even if that means having the ability to sync up with a wintel box), and finally a linux distribution. Provided they cover most human languages they will be able to sell the laptops all over the world.
An Aussie.
I could have used that money to put in a bid on an OpenIPO stock and really get the stock like ANDN. That's what I'm doing next time.
Just found out that E*Trade had 66,000 shares allocated. So, up to 660 people were lucky. I have not yet heard of anyone who did get lucky. Perhaps multi-millionaires don't hang out on Slashdot.... yet. :)
.............................. 752,752 ....................................... 752,752 ................................... 66,000 ........................................... 66,000 ................................. 66,000 ........................... 66,000 ....................... 66,000 . 4,400,000
From Edgar Online:
Credit Suisse First Boston Corporation...................... 1,745,744
Deutsche Bank Securities Inc.
Hambrecht & Quist LLC....................................... 752,752
Lehman Brothers Inc.
Bear, Stearns & Co. Inc.
E*Offering Corp.
Invemed Associates LLC...................................... 66,000
Charles Schwab & Co., Inc.
SoundView Technology Group, Inc.
Wasserstein Perella Securities, Inc.
----------
Total............................................
----
Think of the money VA could have had if there really is this much pent-up demand for their shares.
Although I have no real comment about VA Linux systems or their stock price, I will contend that the financial analysis in this comment is, at the very least, extremely obfuscated, and at worst, extremely flawed.
... + 40(1/1.15)^10
... + 40(1.15) + 40
The first result of interest theory that applies to this comment is with regards to the profit stream of 40M dollars per year. If we take his valuation interest rate as true (which seems extremely unlikely since most all profits will be invested in non-equity projects), then we arrive at a present value function that looks like this:
40(1/1.15) + 40(1/1.15)^2 +
Which is equal to 200.751 Million Dollars. This, of course, represntes the value in today's dollars of the specified profit stream.
Looking at the future value function (the value of the profit stream 10 years from now), interest theory gives us:
40(1.15)^10 + 40(1.15)^9 +
Which is equal to 812.149 Million Dollars.
Neither of these values is the 270 Million claimed.
The author goes on to make claims comparing future cash values with present cash values violating the foundation of interest as a vehicle to translate between the value of money in seperate years. He also makes claims about the "rate of return" necessary of Amazon.com in order to achieve some unarticulated goal.
It also seems strange that any company who's cost of capital is 15% who choose to invest that capital in further operations that only yeild 10%! What a silly idea. I could (a) take the 40 Million I now own (net of Dividend Payments) and invest it in whatever is generating this 15% cost of capital and earn a healthy 15%, or I can (b) reinvest this money into my company which is generating 10% ROI; I think there is no real choice involved. (For reference, I work for a company who assumes a cost of capital of 8% (this year) and won't allocate budget dollars to a project expected to earn under 16%, and I work for a very conservative company!)
Because I am not a expert in finance (though Actuarial Math), I will not make claims against what appears to me to be ludicrous analysis, but I can't help but be dismayed by people claiming knowledge not their own.
Tony
If VA Linux's shares close with a similar gain, it could take the lead from the globe.com , as the biggest first-day gainer ever among initial public offerings.
Is it really hard not to put a Matrox board in there? I guess it would take me 5 minutes to pick a board for a Linux box. Just go to Redhat or XFree see what they support, don't put in what they don't. VA Linux is worthless in my opinion.
If the VA Linux project Enlightenment was better I might of bought some stock. The idea of having a whole desktop environment (or shell) from a monolithic program seems stupid if you ask me. Besides, Mandrake thinks he is above us and should not reply to email- Raster seems a little better.
Real men dump cores! Read my journal, I am neat.
Oh man, thank god I put in a Limit Order for 20 stocks with a maximum cap of $75 each. That would have cost me $1500. I nearly flipped when it came out at $300. If I had a Market Order for 20 stocks at that price, I'd have to dig out a cool $6000!
As a previous poster noted, I hope no one got burned by this.
Sig (appended to the end of comments you post, 120 chars)
I admit my last comment was whimsical.
A witty saying proves you are wittier than the next guy.
However how many have bought from Penguin Computing? What's their reputation like. Just from browsing there web page I got a pretty good impression. There site is clean and loads faster than VA's and they seem to really know what they're doing. In many instances (RAID comes to mind) Penguin seems to be more flexible than VA.
So what's the deal. Anyone have personal experience with Penguin?
If you're upset you missed out on the VA Linux IPO just buy DOCI... They're way undervalued and provide exclusive tech support for VA LINUX... See - http://www.valinux.com/about/corporate_profile.php 3
Thats a cluster, not a single machine. And plus, VA is not the sole vendor there (IBM is in on it also). Irrelevant anyway, as Wildfire clusters under Tru64 UNIX (formerly DEC UNIX/OSF1) can be larger than that (at least 1024 CPUS, more in later releases). Plus you get true single-machine administration and NUMA. Oh yeah, and its 64-bit from the ground up. Oh yeah, and you can hot-swap CPUs and RAM. Oh and one other thing, you can actually buy applications that will utilize all of its power (Oracle and Informix, as well as others).
Sorry, its not the same. One day Linux will be able to do this (I hope), but not now. Besides, we were talking about VA, not Linux as a whole.
http://gammatron.weblogger.com
but we're talking about signing up for, and getting, the IPO offering price. We're not talking about buying it once it opens.
----
I wonder how many people will show up for work Monday. Might it be time to retire and live in the sun.
It's not the size of your stack that matters, it's how you push and pop
Listen up, that's what we're talking about - there were some IPO shares available through e-trade. We're trying to find out if anyone got them. We're not talking about buying on the open market...
----
Looking at that page, the way to get "platinum" status is to make 75 trades (that's $1500 in commissions) in 3 months. Then you get to be "platinum" for the next three months, and get a better shot at IPOs.
This is from the same people who say they're looking for people to buy and hold the IPO shares for a long time.
SO - make an average of over 1 trade per day for three months, then you're eligible for an IPO. Yeah, they're looking for long-term stock holders, alright...
----
i put in a limit order around 6 a.m. for 30 shares/$50.... surprise.. the damn stock opened at $299.. WTF is an investor supposed to do to get into the game??? I mean if a share is priced at $30 dollars and opens at $299 who the hell is going to be able to buy anything? Who was able to get in at $30/share and I'd like to know HOW... I suppose it was either people with ties to the company or ..*dumbfounded* ..Does it have something to do with E*Trade or is it because my broker is Wells Fargo?
-----
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.
BTW am I the only person who thinks it is
very much backwards to be at the Newsstand and
see an Ebay magazine?
Kind of silly if ya ask me.
hmmm It would be kinda cool if you could bid for
stock on ebay...be more fun then the silly system
they have set up now for stock trading.
Oh well...its all just paper with funny pictures
on it anyway.
"I opened my eyes, and everything went dark again"
Who cares about "customized hardware" linux solutions, the reason I bought VA was because they fund many great linux projects and resources. Themes.org, Enlightenment, Econsole (yeah the transparent windows and customization features make an enlightenment desktop much better than any explorer.exe windows shell) future filesystems for linux, Buddy buddy with Intel and their new chips and harware and they are strictly for innovation and evolution. I think they should even make their own distro now that they have the money. More power to VA.
Write more window managers? Write more device drivers? Red Hat broke $200 in November but how much have we seen result from that? I'm still using Netscape 4 to read this and the same software I was using before the IPOs for all the networking. Red Hat still employes only 7 engineers. I still wouldn't dream of finding a job coding in Linux and the number of people wishing they could code Linux software for a living hasn't changed.
It has been revealed that VA has significant investments from the Russian mob (RM). For years the RM has been trying to claim a stake in American industry by leveraging their huge cash reserves. This way, they intend to execute a double-sided strategy of laundering money and siphoning American industrial know-how to Russia. Knowing full well that Russia possesses cheap well-educated human resources (many bright Linux programmers are based there), the mob picked VA as the fulcrum for future expansion of its illicit profits. VA was willing to succumb to such influence, given its high, early turnover and fears of the Redhat/Microsoft menace. The end result for the mob is that they intend to legitimately siphon off know-how and revive the Russian economy with their own version of an IT industry. Eventually, VA stock will end up worthless as it ends up dealing in the black market.
You know it's just because Rob & Co. can't WAIT for the Quiet Period to be over & done with :)
i dont display scores, and my threshhold is -1. post accordingly.
With $10 billion in cap,
BUY the LZW patent from UNisys, do us all a favour please, put your money where your heart is.
Aquire the patent for 5 or 10million, then make it free. Failing that your just like the rest of them.
Okay, my bad. Just a little misunderstanding of the terminology. (Hey, I work with computers, I'm not a stock broker.) I had understood that the real meaning of "opened" to mean the offering price. (Which, I guess, is called the offering price...) So I guess I was wrong. My boss got "the letter"... And he had his stock broker get extra shares. He was a millionaire yesterday, I'll bet he's a multimillionaire today.
Another non-functioning site was "uncertainty.microsoft.com."
The purpose of that site was not known.
... but the stock market will, eventually. Does anyone else think that this "irrational exuberance" (to quote a certain Mr. Greenspan) has gotten ridiculously out of hand? I'm no market expert, but none of this current boom seems to actually be based on actual company value, but rather what people think stock is worth to others. As soon as there is a crisis in confidence (for whatever reason) the bottom will fall out of the market like crazy. I dread to see what happens on that day...
IAAL,BIANLY
Andover.net tried to negate that as much as possible by offering a "Dutch Auction".
:) The idea is to better determine the price of the offering through an initial bidding process with individuals and institutions.
This method is unlike traditional underwriting methods in that it is set up to avoid these huge first day run-ups... insuring most of it goes to the company (those greedy bastards at Andover.net
Funny you mention the tulip bulb mania, because this is where "Dutch Auction" got its name from.
Needless to say, the method did not work very well as Abndover.net still ballooned up 252% at the opening.
This is true:
I went to my local supermarket and read a sign on the checkout counter:
"Help wanted, F/T or P/T, stock option available".
I think it's a good time to liquidate my portfolio and start buying Gold.
So I'm a bear, so what.
--- You make things foolproof, and they'll find you a damn fool.
Sorry again... I am an idiot.
Digital could, look where it go them.
-joev
Well it sure hasn't hurt corel any!
Holy shnoikles!!!
If that's what it takes to make them go away...
Anyone else notice:
"Few personal computer users have ever used Linux, and it lacks the graphical user interface that makes Microsoft Windows relatively easy to use."
In the Reuters reporting that has been bought by all the news distribution channels?
Deleted
nuff said
IM RICH!! ::DANCES:: IM RICH!
what are you living in a cave somewhere in fairy land?? your a lil late, guess you better keep on livin in that trailer.:)
I got their letter to buy something like 100 shares. Unfortunately, I got it a day before the forms had to be returned, so I didn't pay too much attention to them. I'm not much of a stock guru, so most of what was said in the letter of introduction and prospectus (?) seemed greek to me.
Did anyone else jump in on this?
Here is a better article
;)
I really like the part about Linux being faster than NT
--fatboy
im pissed off because im one of many fucking buying the boxed software, allowing the linux companies to get larger, and i cant get in on the IPO to a company ive been supporting for years. i hope the investigation into the investment houses, and the way they conduct IPO's fucks them good, but thats not likely now is it. One things for sure, im NEVER buying another boxed set.
MEEPT!!!!!
Meept has word from his facist overmind that VA will die because:
MEEPT!!!
[a poem]
silly company selling smelly gnulix
is overpriced. watch as the slapdash
posters drool.
MEEPT!!!
Meept doesn't taste any broccoli here.
Why should they buy Troll Tech? Who told you Troll is for sale? Why is it that negative comments about KDE or QT are always moderated up? Trolls continued independence (and protection from zealots) is crucial to the continued success of KDE and therefore eventual success of Linux on the desktop. Gnome is a toy for geeks. Leave Troll alone. Thankyou
As much as I like VA, I don't understand why their valuation should be higher (long-term) than other computer manufacturers. Let's face it: if, say, DELL wanted to become a bigger Linux company than VA, they could do it in a second.
... email me and I'll give you cash and we can split it 50/50, ok ? :)
:)
I just knew they were going to open big, makes me feel bad I have never touched linux kernel code. Maybe it's not too late to start ?
- sigs are for wimps.
Shares will officially in your the account on tuesday, the settlement date.
You can sell now if you like. Settlement date doesn't change that. To sell, you call the number in your packet, ask to talk to a broker, get the broker's name, tell them your sell order. They will probably hang up on you at this point and will call you back with a confirmation. This is how brokers are. This may seem rude, but it's how thier line of work works.
At the end of the day (After 5 pst probably) everyone will get an email confirming the deposit of the shares in the account. If you do not geta confirmation email by say 10pm pst, you have my permission to flip out and email me spaztically :-)
Please read your Q&A again, the bulk of the people calling are asking questions already asked in thier forms. Please RTM, you'll make this so much easier if you do.
Again, if you have questions , etc, email me chris@valinux.com. I will forward these on to the underwriter.
You are wasting peoples time if you send mail to me and the broker mulitple times. We are receiving the email, I assure you. Everyone that comes in must be checked against the lists we have and that takes a little while.
Happy holidays.
Chris DiBona
--
Grant Chair, Linux Int.
VP, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
Bah!
US stock market nowadays is like some slimy scam! I'm happy that people are getting rich, but it's all insane. People like us aren't the ones that are driving the stock prices crazy, it's the fund managers that are trying to hold on to their jobs, it's everyone and their grandma who is daytrading.
Here's my main beef: there's no opportunity for anyone to profit from these stocks. They gap open to a price that is WAAAY overvalued, and then the corporate investors take their profits, and the stocks dip by the end of the second day. There is no opportunity for average not-well connected people to "get in" on anything anymore.
Stocks are priced, but never go on sale for that price. Why not just start pricing IPOs at $300/share???????
This is not a sustainable model.
I can see it now: Fund manager to fund manager: "we're getting out of Microsoft and getting into linux - Buy every company that does anything with linux and continue to accumulate all stock that you can get your hands on AT ANY PRICE"
I'm sorry I missed out on the VA IPO, but jeez... this is just insane!
Oh well, at least I'm glad that I'm not a not a financial consultant or work for a brick-and-mortar investment firm. Their days are numbered.
I guess this is good news for opensource... there'll be plenty of linux millionaires that can devote their life to creating 32-bit color icons or ultra-cool widgets, or whatever turns them on without having to worry about making a profit from it.... (or needing to prostiture themselves by writing windows code)
Well, looks like a honkin' good start for VA. I just hope the market holds up for all you guys. RHAT and Andover.net look like they're hitting on all 12 cylinders as well. Good luck guys! Lottsa new Ferraris and shit gonna be showin up real soon now :)I can imagine the talk at the next Linux expo:
"Well, MY IPO was bigger'n yours!"
HEEEEEEE
"shop smart:shop s-mart" ash
Seems you need a lesson in stocks. Just because the stock is at $200, doesn't mean Red Hat has free access to all those dollars. Shit, the brokers are the ones who make most of the money. All red Hat got was the initial selling price. The rest is pocketed (hopefully this will be changed by law) by those who got in on the IPO and then made them available at the inflated price. RHAT can start selling of a few million shares to get a lot of the $$$, but that's it. They can only do so much.
ABC Inc. is releasing a Linux-compatible keyboard :)
Maybe I'm just bitter at this madness.
Just a minor correction. It opened trading at $30 a share, with prices soaring to $300. Rising to $300 and opening at $300 are two seperate things. If they opened at $300, then it would have cost everyone $300 to get one share at IPO price. That would be a defenite record. Still, rising tenfold is an amazing accomplishment in its first day.
Another non-functioning site was "uncertainty.microsoft.com."
The purpose of that site was not known.
According to my financial advisor, it is "illegal" for Canadians to participate in an IPO. Canadians have to wait until the company is public before they can buy any shares.
It really really sucks. I think those VA Linux IPO offer letters sent out to Canadian developers may in fact be asking Canadians to break the law!
Or maybe I am missing something here? Obviously I have not read the letter, as I don't qualify. Doesn't VA Linux have a legal department?
IANAL.
Only as far as money goes. The current number 1 closed up 616%, according to the article linked to earlier.
This space for rent. Call 1-800-STEAK4U
Is Andover.net public yet? When is the IPO? I need to make sure I have my etrade account open so I can buy it.. I need a new house.
Very cool. To commemorate their very successful IPO, VA has announced that they will build a limited edition system on par with their StartX ZP workstation called the Dutch Tulip ZP. In the release, VA says that the main difference will be that the limited edition DT ZP will be priced about thirty times what it's worth.
Maybe I can get VA to send me a test machine for a while? Cool stuff.
now if /. goes down there is no excuse, they should get the same shit ebay did. Congrats to the team tho, $20 mil ain't bad for a coupl'a code monkeys.
+&x
So let's see. VA's an Intel-based hardware company. They sell the usual ATX-case Celeron PCs, some decent workstation models, and some good-but-not-terribly-innovative servers in the 1-4 CPU range.
So all the excitement is over the fact that they do a good job of testing and preinstalling Linux on them? That they have a modest services operation that builds turnkey Beowulf clusters? That they employ a few prominent programmers, and do some of their own hardware R+D?
And once the Dells, IBMs, HPs and Compaqs of the world ramp up support and services organizations for Linux, where does that put VA? VA makes good, speedy machines, but customers that care most about speedy machines want a hardware vendor with a broad product line and a comprehensive support solution. Supporting only one OS on Intel hardware is a bit archaic these days, and VA's 4-CPU top-of-the-line makes them no more a threat to Compaq in the Fortune 500 than Dell is.
By comparison, Cobalt is a more rational investment. They picked a couple of vertical applications and homed in on them hard.
... why is it that companies with little or no profit go public and their stock sky-rockets, when there are little or no reasons for it to do so, other than people's fascination with linux, and the potential for the so-called 'future growth'? Stupid day-traders....
As their ticker symbol is LNUX, my guess is that most stock buyers out there think they are buying shares of Linux. The hopelessly uniformed and their money are soon parted...
I am a dynamic figure, often seen scaling walls and crushing ice.
They're not just a beige box builder that added Linux to their name, they actually do know the OS and what kind of hardware to put it on well. When we got a Linux workstation last spring, Gateway considered it a "special engineering" cost of ~$500, Dell charged as much as for NT, and both of them offered a selection of adequate but poorly-selected-for-Linux hardware, going with Adaptec over Buslogic, with some poor video card over Matrox... just basically taking their Windows workstation and slapping Red Hat on instead. I'm sure the big vendors are putting Linux prices in line with reality by now, but they're probably still shipping hardware with reverse-engineered drivers.
now if /. goes down there is no excuse, they should get the same shit ebay did. Congrats to the team tho, $20 mil ain't bad for a coupl'a code monkeys.
(why was this off-topic? Andover is as much a Linux stock as anyobdy else, I was angry they didn't post it here.)
+&x
Needless to say that I would have loved to get my hands on the $$$.
In the intial letter, they did _NOT_ list Canada as an allowed country. They did accept applications with the hope that they could make it work out, but could not. Interestingly, the person at DB that I talked to said it was due to tax issues. I would be interested to know the details there.
Thinking that they can magically verify what country that someone at the other end of an email address is resident in before sending it is silly. Just because your address was included doesn't mean they think you are a wonderful hard-core open source developer. And just because it wasn't doesn't mean they think that you aren't. They have to get lists from somewhere.
Chris, thanks for your reassurances. This is more nerve racking than the birth of my second daughter! I cannot comprehend what you guys are going through.
Re: Selling. I'm not sure which # or packet that you are talking about. Do you mean the Alex Brown 800 # or the VA Linux Directed Share (415) #? Does the entire lot have to be sold at once or can we just sell off enough to cover our initial outlay?
A similar bubble was around before 1929 in America. That bubble burst and we had the Great Depression.
If this is a bubble, what's going to collapse when it bursts?
I'm going to hide under my bed now. (I wish I could figure out how to make money out of being a bear. I'm supposed to invest in gold I think, is that what bears do?)
All the creatures will die, And all the things will be broken. That's the law of samurai. (Jubai, 1605)
It is indeed true that slashdot's comments are its most important asset. Those who begrudge CmdrTaco his large net worth based on this site would do well to consider the intelligent dialog that progresses in internet time on slashdot.
Doesn't anyone get it? VA left some $270/share on the table! How can it be good when you sell something worth $300 for $30???? NOTE TO SELF: When going public, find an underwriter who PROPERLY values my comapnies worth!
Unfortunately, their voice mailbox is full.
And people who buy into "RHAT" think they're getting a clothing manufacturer? And people who buy "FON" think they're getting every telephone on the planet? * Nobody is that stupid.
* - Okay. There's got to be one or two numbskulls out there who invest completely upon the name of a stock. But they're so small, why worry about them?
I know how a stock's price is set with a currently traded issue (based on bid and ask prices).
But how is the price set on a new stock? Did someone ask $300 when the stock started trading? If so, it would seem to me a nice way to artifically inflate the price. Just get a buddy to buy some shares at the price you ask.
I called to confirm the shares this morning and I'm considering whether to sell or not now (DB lines are continually busy so I can't get through to a broker anyways).
Let me give you an idea of how ridiculous it really is.
:)
Right now, VA Linux has approximately the same market cap of Amazon.com = $11 billion.
The reason I am going to talk about Amazon is because I recently ran a model on Amazon... but not on VA Linux.
Sales in 1998 for Amazon.com were $590 million.
VA Linux had $14 million.
For both companies, we can assume an operating margin (profit) of about 10% (Both are in highly competitive areas, with VA Linux having significantl higher barriers to entry). This will give us abou $40 million in net opertating income after taxes for Amazon.com (exluding startup costs). Assuming absolutely no growth out of Amazon.com, what would $40 million over the next 10 years be worth?
To get that number, we need a discount rate, or the cost of capital needed to generate those earnings. Because the stock is volatile, we assume a high cost... 15%.
Divide $40 million by 15% which gives us $270 million.
With no future growth, this is what Amazon.com would be worth ten years from now $270 million Which equals about $2.25 per share.
Obviously, investors are betting that Amazon *IS* going to be growing over the next ten years... but let's find out how much they are betting on ti growing:
Simply subtract $270 million from the current market market value ($11 billion), which gives us $10.7 billion roundly. How much do they need to grow? Well, by putting these numbers into our handy financial calculators we come up with an average annual return of 59.6% a year for ten years assuming margins of 10% and a 15% capital cost. Is this unrealistic? You bet.
Another way to look at it:
Barnes & Nobles and Borders together generate about $5.3 billion in sales with a scant 2% profit margin. People buying Amazon.com right now, are betting that they will completely run Brders and Barnes & Nobles out of business, as well as succesfully stealing a ton of market share from other business areas it is entering into.
Well, VA Linux generates even less revenue than Amazon.com... yet is valued just as high. Throw in increased pressure from IBM, Sun Microsystems, Compaq and Dell, and you are looking at a company with absolutely no room for error.
Good luck
Call the 415/800 number (either of them should be fine) and ask them.
Chris DiBona
--
Grant Chair, Linux Int.
VP, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
I found this story on MSNBC rather interesting... It was a bit of a chuckle... It mentions Slashdot, too, so its worth a peek.
Look at Corel, too. 39! Forty times what I paid for it. Shoulda bought 10k shares.
In general, I agree with your very perceptive assessment (somebody moderate his comment up, please), but I confess that as a Capitalist and Linux goon, I'm a little confused by the last bit:
On another note, I find it laughable how the linux goons are trying their damnedest to cash in. I guess communists would abandon their ideals for a wad of cash given the chance.
I'll admit I don't like Socialism or Communism very much, but I don't think characterizing "linux goons" as communists (and by extension, Free Software as being inherently communistic) is very fair or accurate. Many of us are capitalists who have ethical concerns about taking unfair advantage of situations of universal zero marginal cost.
DNA just wants to be free...
And then put QT under GPL, removing once and for all what may be the biggest question mark in the open source world.
Like all the other linux IPOs, VA needs to beef up its assets by acquisition before the blush fades. Troll Tech would be a high profile, community-oriented acquisition that would have the immediate effect of boosting VA's market capitalization yet further. This would be a far more satisfactory arrangement that, for example, Troll tech winding up as a division of Red Hat, which already has a lot of influence over Gnome. We have to watch out for too much concentration of power on the commercial Linux side, and we have to let our desires be known.
Corel should also be thinking about making this move.
Looking into my crystal ball, I see flocks of bankers bearing bags of money camping out on a certain doorstep in Norway...
Life's a bitch but somebody's gotta do it.
As a windows/linux pc seller, VA is fine. But as for the websites they sponser? My god, they are poor. Maybe linux.com is worth something, but still....
You start with 0 shares of high-priced stock (that's what you have now, right? 0 shares).
You sell 100 shares that you don't own at the market price, say $130 per share.
You now own -100 shares of high-priced stock, and $13,000 in cash.
You wait for the high-priced stock to collapse back to $80.
Then you buy back the stock at $80 per share, leaving you with 0 shares per stock (flat position) and $5,000 in cash. That $5,000 in cash is your profit.
But if you wait too long, the over-priced stock becomes even more over-priced at $280, your broker takes all your $13,000 plus the next $15,000 in your account, and buys back the 100 shares you sold that you don't own. So now you are flat with a $15,000 loss!
Moral: don't short on valuation. But basically, that's what bears do when they think a stock price is too high. If they're right, they make money.