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Linux Business The Almighty Buck

OpenIPO and Lindows 158

Posted by Hemos from the raising-the-money dept.
An anonymous reader writes "Lindows is using bankers WRHambrecht and their OpenIPO process when they go public. The lower end of the pricing range will net them more than 50MM. But OpenIPO is designed to let ANYONE bid on IPO shares. If Linux can keep investor's attention and Google announces their own IPO, they could raise much more which could have impact on desktop Linux. Same CEO had near perfect timing raising 300MM with MP3.com IPO." OpenIPO is the same route Andover.net took back in the day.
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OpenIPO and Lindows More

OpenIPO and Lindows

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  • Lindows? I thought it was not Linspire (Score:5, Interesting)

    by Ra5pu7in ( 603513 ) <<moc.liamg> <ta> <ni7up5ar>> on Monday April 26, 2004 @11:31AM (#8972839) Journal
    Ahh, so the real reason they want to avoid a drawn-out battle with MS is revealed.

  • Surprised by Wealth! Then by Total Loss! (Score:5, Funny)

    by sulli ( 195030 ) * on Monday April 26, 2004 @11:32AM (#8972844) Journal
    OpenIPO is the same route Andover.net took back in the day.

    And we all know how well that worked out.

  • Broken Link (Score:5, Informative)

    by xy ( 49954 ) on Monday April 26, 2004 @11:34AM (#8972874) Homepage
    The link to OpenIPO is broken. It should be:

    http://www.openipo.com/ [openipo.com]

  • Desktop Realitites (Score:5, Insightful)

    by deliciousmonster ( 712224 ) on Monday April 26, 2004 @11:37AM (#8972902)
    Mod me down if you must, but I hope that a majority of the IPO dollars are spent refining the GUI AND THE FUNCTIONALITY to be more similar to Windows.

    The fact of the matter is that it will have to more closely mirror M$'s interface than you think to be accepted, perceived improvements included.

    If Longhorn came out with an OSX-like GUI, it would work, but any other OS has to ingratiate itself slowly.

    Not that 2008 for Longhorn isn't slow, but you get the point.

    • Re:Desktop Realitites (Score:3, Interesting)

      by NineNine ( 235196 )
      Mod me down if you must, but I hope that a majority of the IPO dollars are spent refining the GUI AND THE FUNCTIONALITY to be more similar to Windows.

      I hope so too, since I'm going to be shorting, and this company is going to be nothing but a big lawsuit target for all kinds of copyright & trademark infringements. Hell, leave the name "Lindows", make a "Start" button, and put a big MS logo on the desktop.
    • Mod me down if you must, but I hope that a majority of the IPO dollars are spent refining the GUI AND THE FUNCTIONALITY to be more similar to Windows.

      If by "refining the GUI" you mean hiring sales and marketing, and padding the salaries of executives, you're perfectly correct.

    • Re:Desktop Realitites (Score:5, Insightful)

      by nycsubway ( 79012 ) on Monday April 26, 2004 @11:51AM (#8973044) Homepage
      You have a point there. It's not only to mimick what people are used to, but Microsoft has spent years and millions of dollars doing research to find what GUI most people will accept.

      A linux desktop should look like Windows not only because its what people are used to, but its what most people have proven to be able to use.

      • Microsoft has spent years and millions of dollars doing research to find what GUI most people will accept.

        Oh? And when did they do this research, and what came out of it?

        Did they do this research before Windows 3.1? Did they do this research before WIndows 95? Or did they do this before Windows XP, and create the new interface that everyone truely hates?

        If Microsoft really has been spending lots of money on research, they've been getting ripped off by somebody.

      • A linux desktop should look like Windows not only because its what people are used to, but its what most people have proven to be able to use.

        Because their alternatives have been....?

        And you make a huge leap in coming up with the statement "proven to be able to use". How come the SAME issues always come up for newbies? Sure, they get used to clicking on Start for everything, but their initial inclination is not to do so.

        Why not have Administration, Applications, System, Internet buttons at the botto

    • Re:Desktop Realitites (Score:5, Insightful)

      by Liselle ( 684663 ) * <slashdot@NoSPAm.liselle.net> on Monday April 26, 2004 @11:58AM (#8973111) Journal
      No, I'd mod you up if I had points, because you're absolutely right (that's what you meant, though, isn't it?).

      Even Microsoft faced a backlash when they screwed with the UI in Windows XP, despite the fact that it's more intuitive. After users finally got used to the setup in NT/95/98/ME/2K, everything got flipped on its head. Fortunately, they are smart, and left a classic view in.

      For a Linux distro with a small userbase, trying to get Windows converts is an uphill battle if the UI looks different than Windows. Maybe not for you or I, but the technically inclined are a minority section of the Windows userbase. There is a lesson here, I think.
      • Aye on the classic view thing. Have you ever seen an XP Desktop that isn't set to classic start menu and classic theme? During install before you've changed it doesn't count of course.

        All that extra bloated UNintuitive crap goes by by.

    • Re:Desktop Realitites (Score:5, Insightful)

      by happyfrogcow ( 708359 ) on Monday April 26, 2004 @12:02PM (#8973151)
      Mod me down if you must... [snip]

      You hear him. Mods, get at it!

      Seriously though, screw MS-Windows functionality. In Outlook it sometimes freezes for a minute if I make a quick mouse movement and click on a menu. It feels like it's pondering which button I really wanted to click on, almost as though the click event happened in two different widgets. And after a minute of what I can only believe is highly intelligent AI computations, it finally determines that I wanted to click on "View" instead of the printer icon.

      Now the quality of the GUI is arguable. It's widely known, and while that's not all it has going for itself, I feel it's the bigest reason why people continue to use new iterations of MS products. If the computer illiterate has to do anything other than their repetitious task, they won't know what to do (i mean, the structure of menus within menus leading to dialog windows isn't obvious). But this mostly comes down to the fact that the typical users don't ever read the documentation or bother with the help system.

      So what's my point... I guess that it is this. We do need a consistent Look and Feel in Linux, that is atleast superficially similar to other popular GUI's, but in functionality (average response time..etc) it should surpass those other GUI's. Arguably we have this already through "themes", though maybe not completely (GTK, QT, TK, Swing, etc all look different).

      What I fear is that a lot of that IPO money will probably end up in marketting, causing Lindows to be the first Linux introduction to many people. I don't know a lot about Lindows but I doubt it is up to large scale scrutiny. A bad distro + MS-FUD could do some big damage to public perception of Linux.

    • Mod me down if you must, but I hope that a majority of the IPO dollars are spent refining the GUI AND THE FUNCTIONALITY to be more similar to Windows.

      Um - 20% is going right back into Robertson's pocket, and then the IPO firm is getting a big chunk. So no, they won't do that. This is a legal Ponzi scheme and nothing else. Read the filing. They will run out of money in 24 months. This is a dot bomb waiting to happen.

  • Oh, yeah... (Score:3, Funny)

    by Otter ( 3800 ) on Monday April 26, 2004 @11:37AM (#8972905) Journal
    Same CEO had near perfect timing raising 300MM with MP3.com IPO. OpenIPO is the same route Andover.net took back in the day.

    Sales of disco records increased 700% through 1978! If this trend continues...AAAAAYYYYYY!

    (No, I'm not sufficiently motivated to go to SNPP and get the quote right.)

  • Great opportunity to make $$$ (Score:5, Interesting)

    by NineNine ( 235196 ) on Monday April 26, 2004 @11:38AM (#8972908)
    Short it! I mean, c'mon, this company is run by some juvenile jackass who thought that "Lindows" would be a great name, and actually started to try to defend it. That's the kind of stunt that some college kid could pull, not a CEO of a publicly traded company. I know that I'm waiting for it to peak (day 1), then I'm shorting the hell out of this. Lindows will be long gone within a year or two.

  • Motivation? (Score:5, Insightful)

    by nodwick ( 716348 ) on Monday April 26, 2004 @11:38AM (#8972911)
    Is being "better" enough to make OpenIPO popular?

    I suspect a big reason people use the current IPO process is not because they feel it's the best process for raising the maximum revenue, but because it raises acceptable amounts of revenue while letting people connected to the IPO profit by purchasing underpriced shares at launch. For this reason IPO shares are usually handed out as perks to people connected with either the company itself or their financial firm.

  • Scamming people legally (Score:5, Insightful)

    by BuddieFox ( 771947 ) on Monday April 26, 2004 @11:38AM (#8972915)
    But OpenIPO is designed to let ANYONE bid on IPO shares.

    Sounds to me like legal way to scam/cash in on hype and an overenthusiastic general public.

    Benjamin Graham (Warren Buffets "idol") used to say that IPO stands for "It's Probably Overpriced".
    Factor that in with an irrational and overenthusiastic general public lacking investment skills thinking all IPO:s are winners (they usually forget the last bubble in good times) and you have a table set for even more inflated IPO:s and ludicrous business models going public.
    • Sounds to me like legal way to scam/cash in on hype and an overenthusiastic general public. I agree it's not perfect, but it's better than letting the investment bankers and large institutional investors be the only ones able to get the opening price.

    • But OpenIPO is designed to let ANYONE bid on IPO shares.

      Sounds to me like legal way to scam/cash in on hype and an overenthusiastic general public.

      Dude... That's all that stocks are in the first place. The have no intrinsic value. They are worth only what people think they are worth, and that is usually due to pure hype.

      A company could be doing incredibly well, and have a good and solid business plan, and their stocks could be worth a fraction what the most popular company's stock are worth (with n

      • Dude... That's all that stocks are in the first place. The have no intrinsic value. They are worth only what people think they are worth, and that is usually due to pure hype.

        A company could be doing incredibly well, and have a good and solid business plan, and their stocks could be worth a fraction what the most popular company's stock are worth (with no business plan, and no profits).

        For a good example, try Amazon.com. Their stock was through the roof, even though they had made no profit at all, and th

        • To say a stock is only worth what the market is willing to pay at any particular moment in time is foolish.

          Educate me then.

          Let's say some rumor has scared people away from Microsoft, and the stock price drops to practically nothing. You have 100 shares... How would you be able to get more than the market price for them? If you have no buyers, the stock has no value.
          • Well, I'd say that that is unlikely to occur in such a business for that long (based on its cash), but OK. What you have there is a liquidity problem. That stock would still have 6 billion dollars in the bank and a large and consistent revenue stream...

            a) If enough of the shareholders got together they could always vote to liquidate it for at least the value of its cash holdings (some 6 billion dollars).

            b) The only way such a fall is likely is if MS's growth prospects suddenly hit zero or worse. In thi

            • a) If enough of the shareholders got together they could always vote to liquidate it for at least the value of its cash holdings (some 6 billion dollars).

              That is a valid answer, but doesn't really detract from my point. Saying stock has no value was a bit over-stating things on my part, but it's actual value is nominal.

              A large intelligent buyer would likely make an offer on this stock

              That's been exactly my point from the beginning. Stocks are a pyramid scheme. Money moves around, all to get a piece o

              • That's been exactly my point from the beginning. Stocks are a pyramid scheme. Money moves around, all to get a piece of paper that has nominal real value, because one person believes that there will always be somebody else that wants to do the same thing.

                [snip]

                Very well, but the stock prices have nothing to do with the value of a company. Growth or Drop, stocks are worth what you think other people will be willing to pay for them, and not based upon the ammount of cash reserves you think the company will

    • Mod this man up! He recognizes that a stock market is usually "opened" widely for the purposes of cashing out the names in the investment business. Such an opening is the very definition of an investment bubble.

      Anything like OpenIPO is going to be another battering ram against the floodgate of IPO management. I'm not saying don't let people get involved if they want it; I'm just saying that if you do advocate such a thing, don't be all shocked and awed by the crash that MUST follow.

  • Micheal has learned from experience. (Score:4, Informative)

    by Bill, Shooter of Bul ( 629286 ) on Monday April 26, 2004 @11:41AM (#8972935) Journal
    He had one of his infamous Micheals Minutes a while bakc that discused the ipo porcess he went threw with mp3.com. He was disgusted int he way that the shares were sold to cronies and friends of the finatial institutions that conducted the IPO. It reduced the amount of money the company raised, while make millions for others who did absolutely nothing. So, I'm not suprised he wen OpenIPO on this one. Still, I wouldn't be suprised if this was the begining of the end for Lindows. If you read the public disclosure that accompanied tha annoucement, they mention that they are essentially out of cash, and losing it hand over fist.

    • Re:Micheal has learned from experience. (Score:4, Insightful)

      by kevlar ( 13509 ) on Monday April 26, 2004 @12:29PM (#8973373)
      The funny thing is that if you have a stable business with stable income, you don't need to rely on venture capital and therefore would have much more clout when it comes time to whore your business to America via Nasdaq.

      When you raise venture capital, you sell your business to pimps, who in turn whore it out to the world. Thats what VCs do. If they had a legitimate business model, they wouldn't need to rely on VCs nearly as much.
    • He had one of his infamous Micheals Minutes a while bakc that discused the ipo porcess he went threw with mp3.com. He was disgusted int he way that the shares were sold to cronies and friends of the finatial institutions that conducted the IPO. It reduced the amount of money the company raised, while make millions for others who did absolutely nothing. So, I'm not suprised he wen OpenIPO on this one. Still, I wouldn't be suprised if this was the begining of the end for Lindows. If you read the public disclo

  • Lindows IPO (Score:5, Insightful)

    by doodlelogic ( 773522 ) on Monday April 26, 2004 @11:43AM (#8972974)
    It is interesting that this company's management was apparently involved in previous dud tech floats. This is the latest in a long series of floatations by companies that have not gone from the stage of having a good idea to the stage of making money from it. There is an unfortunate precedent for this company: just as users of mp3 sites wanted (at that stage) something for nothing, so linux users are generally still looking at the system as a cheaper, or free, alternative to those on the market. For Lindows to make a decent profit, it will either have to change the culture of its user base, or make serious inroads into the entrenched Windows market. Either will be a formidable task.

    • Re:Lindows IPO (Score:4, Interesting)

      by _Sprocket_ ( 42527 ) on Monday April 26, 2004 @12:46PM (#8973574)

      ...here is an unfortunate precedent for this company: just as users of mp3 sites wanted (at that stage) something for nothing, so linux users are generally still looking at the system as a cheaper, or free, alternative to those on the market. For Lindows to make a decent profit, it will either have to change the culture of its user base, or make serious inroads into the entrenched Windows market.

      Unlike all the Windows users who like to "pirate" their applications. The workings of the scene itself may not be about free stuff. But they certainly feed a rather large mass of people who like getting stuff for free. This, of course, doesn't mean that there are no paying customers for Windows or Windows applications.

      Enter Linux. Sure - people like free stuff. But that doesn't mean all Linux users won't pay for something. In every environment I've worked in for the last 9 years, the organization I worked for could afford anything they want to include Windows and all commercial Unix products. They ran all these environments... and Linux. They would even pay for Linux support and applications that ran on Linux. And today my Organization pays for RedHat Enterprise.

      As for me... my own workstation at home is Debian Linux. My laptop is Mandrake - from a boxed set I purchased at the local Best Buy. I also own several commercial games that I purchased either at a local store or online. I prefer Open Source applications but will pay a fee for software when there is sufficient reason too. And I do the same at work.

      Sure - Lindows has a hell of a rough road in front of them. Anybody trying to launch a desktop OS in to this market does. And fighting dominant desktop environments such as wintel and MacOS is tough enough without also competing against other Linux vendors. But whether Linux users will pay is not the issue. They will. They do.

      But will they pay for Lindows?

  • I'll invest... (Score:4, Funny)

    by kevlar ( 13509 ) on Monday April 26, 2004 @11:44AM (#8972991)
    ... as soon as my 401k, multi-million dollar homes, multiple ferraris and student loans are all paid off and I have some expendable income that I'd rather donate to the Linux movement rather than to my local soup kitchen...

    • Re:I'll invest... (Score:4, Funny)

      by LilMikey ( 615759 ) on Monday April 26, 2004 @12:46PM (#8973566) Homepage
      I've been paying off my 401K for years and it only seems to get bigger.

      Haha! When I started off here I noticed my 401k balance was 0. They almost fooled me into making payments toward it as well but my wily arse saw through their plot!

      Personally, I only invest in "Credit Cards". The intrest rate is astronomical... look into it.

  • I seriously want to know! (Score:5, Insightful)

    by wo1verin3 ( 473094 ) on Monday April 26, 2004 @11:52AM (#8973058) Homepage
    But can someone explain what the huge appeal with Lindows still is? All of the hype building up to the release had to do with it's ability to run Windows apps [archive.org].

    This functionality was never above or beyond any other Linux distribution... so it's just another distro now... right or wrong? What else does it offer besides the click and play?
    • It's one of the few Linux firms that actually has a marketing department to tell people that they exist. Average people have never heard of SUSE, Mandrake, Slackware, Knoppix, etc. I'm betting only a tiny percentage of average people have ever heard of Red Hat and know that they make software.
    • Especially considering that at $50 for the OS and $50/yr for the subscription to their software archive you might as well have just purchaced XP.
      • Especially considering that at $50 for the OS and $50/yr for the subscription to their software archive you might as well have just purchaced XP.

        Or bought Xandros. Or Lycoris. Or Mandrake. Or anything else. It's just a scam, and Robertson will be on to something else.
    • It looks to me like they changed their business plan for some reason, maybe because they found out it was harder than they thought, or perhaps even unecessary given the later emergence of things like StarOffice.

      We also don't see Rhapsody shipping from Apple, Chrome shipping from Microsoft, or any number of other projects announced with great fanfare but never released.

      If you required companies to actually ship what (and when) they say they're going to ship, Microsoft would probably have the most to lose.

  • Details? (Score:3, Insightful)

    by FreeLinux ( 555387 ) on Monday April 26, 2004 @11:56AM (#8973103)
    Ok. So you think the Lindows IPO is news. It may well be for some people.

    But, when you report about IPOs it is usually a good idea to offer a bit more information about the company and its impending IPO. The link to the SEC document doesn't offer any of this information.

    How about a bit of information about the company and its present financials? When is the IPO scheduled to occur? I hope for their sake it is nothing like Andover.

  • Grasping at straws (Score:3, Interesting)

    by andih8u ( 639841 ) on Monday April 26, 2004 @11:56AM (#8973105)
    If Linux can keep investor's attention and Google announces their own IPO, they could raise much more which could have impact on desktop Linux.

    Its kind of sad how every linux story is always "this will probably maybe most definately finally be the tipping point for desktop linux." Lindows, or whatever their name of the week is, having an IPO for a product that will probably crap out in the near future, certainly won't help linux on the desktop as it will make investors more leary of linux.

    • I'm reading: which could have impact on desktop Linux and struggling to see how you transmogrified that into: this will probably maybe most definately finally be the tipping point for desktop linux?

      Given past generosity/support from Mr Lindows, presumably more $$$$ for Lin---s will result in more projects like Nvu [nvu.com]: I don't think we can really expect - or claim we were promised - more than that.

  • 50 millimeters!?!? (Score:4, Funny)

    by vijaya_chandra ( 618284 ) on Monday April 26, 2004 @12:11PM (#8973233)
    50 millimeters of what?!!?

    Why can't the editors be a little sympathetic to lamers like me in expanding acronyms!?!

  • The only reason a reputable company would use OpenIPO is because their business model is not compelling enough for the big boys of finance to take an interest in.

    The capital markets are open for everyone to use, given you have a solid business model. If don't, then you go to "alternative" capital markets, like OpenIPO or junk bonds.

    Yea, there are success stories that arise from these alternative financings, but they are rare.

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