Red Hat & VA IPO Speculation by CNET 71
diogenes write in to send us a CNet article that speculates wildly
about the IPO Intentions
of Linux Heavyweights Red Hat and VA Linux Systems.
Red Hat denies it (as always) and VA Speculates (as always).
Mentions Mandrake working at VA and wraps up with a bit
about Cygnus. I wonder where Linuxcare fits into all this,
but other than that, this a good summary of the picture right
now.
What is VA's GUI effort? (Score:1)
Here's YALG -- Yet Another Linux Gui (Score:1)
Does anyone have more details about this? It looks like the Linux desktop may be fragmenting despite being OSS. Hopefully they will address issues of compatibility before they get too far into the design process.
Arrg... not the one button thing again. I've got 4 fingers and one thumb on the mouse... why not use them all?
Jono
Motley Fool is great site for new investors (Score:2)
They also have a site called www.foolu.com [foolu.com] targeted at students with questions about finances and investing.
Whatever... (Score:1)
Actually, since I've started here (2 months ago),I
can't believe how pleasant and professional the people I work with and the enviornment is. I havent heard anyone yelling at anyone (aside from the nerf gun wars and calls to the 'beer cubicle'), and I'm quite pleasantly greeted every morning (although Chris, all the bowing nonsense is beginning to get to me)..
- One very happy 'god i'm glad i'm in california and working on Linux stuff' VA employee.
-San Mehat
Senior Software Engineer
VA Linux Systems.
Re:Here's YALG -- Yet Another Linux Gui (Score:1)
he is mostly management however, which he's good at. He's the person that I "report" to, although that's a poor way to put it, since I don't have a schedule or deadlines or any of that nature, I just do what I do.
--
Geoff Harrison (http://mandrake.net)
Senior Software Engineer - VA Linux Labs (http://www.valinux.com)
RedHat (Score:2)
From the article: "and Red Hat, currently the most popular seller of the Unix-like operating system."
Perhaps that says everything about the future of this 'industry'. People are losing sight of the principles that
inclined them to choose linux in the first place.
Re:RedHat (Score:1)
inclined them to choose linux in the first place.
I chose it 'cause it doesn't crash that often. How does Red Hat selling it change that?
Re:More importantly... (Score:1)
_______________________________________________
Re:Has Red Hat and Transmeta grabbed all key peopl (Score:1)
but then again, my personal skillset isn't in the kernel but in other areas.
--
Geoff Harrison (http://mandrake.net)
Senior Software Engineer - VA Linux Labs (http://www.valinux.com)
Re:More importantly... (Score:1)
''I said, "Yeah, dad, watch out for ebay. I think they're going public. They should be a good buy." Too bad he forgot
Make sure to remind him of that every day from now on.
Re:Do they need to? (Score:2)
just my $.02
Stupid question... (Score:1)
My silly question is this. Is it possible for say, Red Hat to sell stock options to free software developers who are not employees of the company, but obviously contribute to it's value. I suppose the SEC has rules against such a thing, but I think it would be really neat if free software developers could purchase stock like employee stock options if their software is used in the companies product, as if they themselves were actual employees.
That way, free software developers, who I would assume are mostly not rich, could actually get in on the ground floor of a Red Hat IPO. It would go a long way towards solving the problem of how to compensate free software developers I would think.
Re:Do they need to? (Score:1)
Seeing as how they are not a public company and you haven't seen their financial statements I don't know how you can say they have plenty of capital. Here is a hint, these "investments" by Intel and the others are just Red Hat selling off part of the company. Now ask yourself, would you rather a portion of Red Hat be owned by the public, or a bunch of companies?
Very good question (Score:1)
Now, whether Red Hat would be willing to do such a thing is another story entirely...
--
Well, you asked for it. (Score:3)
In the short term, we are trying to payback the community from whence we came in the following ways
Hosting projects
Hardware donations (debian/fsf/others)
Outright hiring people to work on free projects (those that have somethign to do with va nad those that have little to do with VA)
Joining organizations that we feel are important to OSS (li,x/open)
Donating to FSF
Running linux.com in a very community way
Of course open sourcing whatever we do.
Helping new proejcts get off the ground
Helping out lugs (somethign near to my heart)
Helping prominant developers with travel/hotel for tradeshows and such.
But we are not really satisified with just this. I'd actually like to solicit help, if you have a good idea, email me at chris@valinux.com [mailto] with your suggestion.
Post IPO, look for us to
Expand the above
Endow open source chairs at universities.
Offer Scholarships.
Expand how we can help out in the lugs and such.
Offering financial/hardware support to those projects that we have not been able to help yet.
and more, hopefully.
This is obviously only the beginning, so there you go. Email me :-)
Chris DiBona
VA Linux Systems
--
Grant Chair, Linux Int.
VP, SVLUG
Re:What is VA's GUI effort? (Score:1)
other people here are also working on improving interfaces to things like printing, etc
--
Geoff Harrison (http://mandrake.net)
Senior Software Engineer - VA Linux Labs (http://www.valinux.com)
Re:RedHat (Score:1)
NOT that he wouldnt pay for good code.
with linux even if it costs money _EVERYONE_ has the power to fix it if they want to.
Just my 2 cents worth
MaShaun
It must suck to be this bitter. (Score:1)
Chris DiBona
VA Linux Systems
--
Grant Chair, Linux Int.
VP, SVLUG
Do they need to? (Score:4)
Re:RedHat (Score:2)
If you think that there is something inherently wrong with Red Hat selling (and therefore making money off of) Linux, consider my mother's situation. She owns a smallish clothing and furniture store in Phoenix, and she has a 20 user network, with print servers and the like, that currently runs Novell 3.something. A while ago, she was in Price Club and picked up a copy of Red Hat. Then she called me and asked me all sorts of questions about what Linux (she called it "Linux", not "Red Hat") could do for her and her looming network upgrade (what with Y2K coming up and all, it's time to ditch those old 486s).
To make a long story short, she's decided that Linux would make a great gateway/firewall machine, and is getting Cox's cable modem in her store. Now she'll be able to work from home. We're also toying with using Linux for a print server on one of the old clients. So now we have a new Linux convert, all because someone wanted to make money buy selling it (and justifiably put Linux in a box with a nice manual a person's mother can understand and sold a bunch to Price Club).
How can that be bad? Red Hat makes money, sure, but the entire Linux community gets another Linux user (instead of another NT user, which she was going to use). Do you think that my mom would have immediately thought of Linux for a gateway system and gone out and downloaded Debian? Not a chance. She saw it in the store (which makes it a "real" product in her mind), read the box and liked it. Plus, she knows she can get support from Red Hat (instead of just me or my brother). That support, probably more than anything else, put Linux right up there with Microsoft in her mind.
So I have no beef with Red Hat selling Linux, and I hope they sell a million more copies and get stinkin' rich in the process. It means that there will be more Linux users demanding (and writing) more Linux software. There'll be more hardware support (I, for one, long for the day when all hardware comes with Linux drivers and info -- kind of like Netgear cards do). It'll put the PC back in the hands of people instead of some stupid paper-clippish thing doing all the thinking for them. Someone's kid will play Quake 4 on a Linux machine and then get to toying around with the OS and might embark on a great new future. (Remember the C-64 and VIC-20? How many people do you think got their start because they got the "priviledge" of monkeying around with BASIC and writing new software for themselves? You think Windows 2000 will foster that same sense of power and curiosity?) These are all good things, and all of them are due in part to companies like Red Hat making money from Linux.
The more Linux the better, I say. And if people make money in the process, more power to them.
-B
Hello again Sam! (Score:1)
Chris DiBona
VA Linux Systems Inc.
--
Grant Chair, Linux Int.
VP, SVLUG
Moderating and Trolling (Score:1)
I don't believe in complaining unless I'm going to do something to help. I'm going to reset my preferences today to make me eligible for moderation. Now, I can start complaining.
Perhaps some consideration should be given to the down-moderation reasons. Right now, we seem to have "Troll", "Flamebait", "Redundant", and "Offtopic". I would humbly suggest adding "Offensive" for the deliberately offensive posts.
Judging from the moderation I've seen lately, we may also need to add a few more reasons: "I don't have a sense of humor" and "I'm a big-time moderator and I don't like what you are saying".
To describe someone's post as a "Troll" is insulting. "Troll" should be reserved for cases where the post is clearly intended to elicit responses with no meaningful purpose. Calling a post a "Troll" presumes that you knew the intent of the poster. I don't see anything in the above post to indicate that the poster was deliberately trolling.
If there was any reason to down-moderate the post, it would be "Offtopic". Unfortunately, it was only last week that I saw an article on Northwest Airlines using Linux which lead to several posts about whether or not FORTRAN is relevant today. Many of these posts were moderated up several notches.
With these standards, I see nothing "Offtopic" or "Troll" in this post. The article was discussing IPOs of Linux-oriented companies. The poster raised the possibility of Penguin Computing making an IPO. Now, if they work for Penguin Computing, this would be a troll. Otherwise, I'm kind of interested in responses to the post.
What say does the community have in this? (Score:1)
The companies that are making money from open source software may be run by people who believe that the open source movement is a good thing, but they are not in business simply to promote it. Those who do care more about the movement than the companies should try to gain influence over the companies.
I wouldn't worry as much about M$ or IBM muscling their way into Redhat's or VA's business (the SEC has rules about this) nearly as much as the toll of being a public company would take on them. From SEC red tape, to a PR dept. making sure press releases don't cause the stock to drop, to
having to meet quarterly quotas, to dozens of other worries, going public is serious business.
1) When a company goes public, they have to keep an eye on the stock price because they are legally committed to making a profit for their investors.
2) A public company is exposed to hostile (or at least not-so-nice) takeovers that can result in major dislocations of employees and product support--even the possibility of dropping a product line.
3) Usually, investors don't try to micro-manage the company, but investors with a significant % of shares can create havoc by voting for/against members of the board of directors and other issues.
I like the posting suggesting that an "Open Source" mutual fund be created. This is an excellent idea because if there were an "Open Source" mutual fund, it could be chartered to help alleviate the above pressures put on companies by investors. This would also provide a source of capital with "pure" motives.
The purpose of the fund could be designed to be supportive, such as requiring that as much as 25% of the investment money be put into start-ups that meet certain requirements. These requirements could be using open source licenses for most of their software, or supporting open source software in most of their customer contracts.
The fund could be modeled on the "Social Conscience" funds (for instance, investing in companies that are pro-environment, etc.). I don't know if it would have to invest in public companies only, but I suspect that if the charter was clear, it would not have to limit itself to that.
The obvious question is, "Who would invest?" Well, since IBM, Intel, etc. have already started, I would say that once the fund was set up, it would probably have no trouble attracting investors. And since the charter would plainly state that it's intention is to invest in companies for the purpose of encouraging the open source movement, no one could easily corrupt it. I would like to see that the minimum investment be no more than $1,000, and preferably $200.
Finally, this could be a way to reward the individual contributors of open source code. The fund could set aside some shares that would be given to programmers using open source licenses. Or the fund could provide something like the grants that are given to universities for specific projects.
Do we have any financial movers and shakers that know enough about this to get it going?
Re:Do they need to? (Score:2)
Barring any deal to the contrary, it is "RedHat" which decides whether or not they go public.
It does not matter whether IBM would prefer stock or cash (though they can get a piece of the company even if it's not publically traded). It does not matter what the employees want. It does not matter what Linus wants. It doesn't matter what I want, though if anyone's listening, put the deed in the mail!
Whoever owns the company decides. IBM and AOL probably own a bit, though we don't know that. Young and the other founders probably own the rest. I don't know. We don't know. But whoever does own it decides, and whether or not they go public will be based on their self-interest (which could of course coincide with mine, Linus's, IBM's, and their employees' self-interests).
Re:Do you feel lucky? Well, do ya?! (Score:1)
Why would I invest money in a company that essentially sells a commodity product (VA) or a compnay that is stking its future on services (Red Hat)? Look at the P/E ratios for companies in either one of these industries.
Of course, it is silly to pick individual stocks anyway according to EMF.....
You are forgetting... (Score:1)
HJ Liu - NFS/Bin Tools
Hell larry's done some kernel code (the one I remember is the 2.0.x patch to detect the >^4 limit on some bios'). We are a little light in the kernel space though, but we make up for it in otehr areas, we're pretty happy about the team we are growing here. This is not even mentioning San Mehat, Mandrake, Mark and the rest.
Chris DiBona
VA Linux Systems.
--
Grant Chair, Linux Int.
VP, SVLUG
Re:Here's YALG -- Yet Another Linux Gui (Score:1)
Chris DiBona
VA Linux Systems.
--
Grant Chair, Linux Int.
VP, SVLUG
Maybe they're too busy working (Score:1)
They aren't paid to surf the cruise the mailing lists all day. Set up a company yourself and you'll find out in about a week that the web can be a major productivity killer.
Anyway, ll they make is PC clones. What are they supposed to add? It's not like their computers have any custom hardware. Every part can be bought down at Fry's.
Re:More importantly... (Score:1)
Point 1) If you only have $100 to $500 to invest, no one is going to give you the time of day. IPO shares are largely reserved for big customers and institutional investors.
Point 2) IPO shares are very risky, so if you are just starting out and don't have a lot of capital, you don't want to be involved anyway.
Re:Maybe they're too busy working (Score:1)
--------
Re:Whatever... (Score:1)
--Kit
The Timing is Right (Score:2)
What puzzles me is why Augustin is puzzled over how to compensate Linux developers.
Well, let me back up: it's absolutely terrific that Augustin wants to secure some sort of compensation for Linux developers.
But why is he puzzled about it? The answer seems obvious. Dedicate a chunk of stock to be distributed across the developers. Stock can be gifted, you know. Perhaps someone from within VA (Chris?) could give us some insight on Augustin's thinking.
Then, when the company goes public, the developers can (after a year, I believe) get some monies out--perhaps to help support additional development.
Another interesting question is how the rest of the Linux--Open Source, generally--community can be allowed to get a stake in the growth of Open Source.
Perhaps a Linuxphilic Mutual Fund could be set up which invests largely in Open Source dependent companies.
Does anyone know how to go about doing this sort of thing?
Of more immediate concern are the impending IPO's.
Perhaps if a fund were set up to allow rabid open source fans like myself to collect together a huge amount of money, and then do the hardest thing possible--get in on the ground floor of an IPO.
To those who fear IPO's as risky: You are quite right to be cautious. But the growth of OSS, and the frankly astonishing growth of companies like VA (as I lovingly caress my VARstation) and Redhat, makes these IPO's a very different proposition from the typical IPO.
Keep in mind that stock markets are a good investment only so long as companies continue to grow. Can't we be somewhat confident that OSS will continue to grow?
I think we can. I've read the arguments in favor of OSS--I've even given some of them in my IT-Ethics class. The arguments in favor of OSS over CSS--some ethical, many economic--are all fo them sound. OSS will continue to grow.
It's time to hitch your wagon up to the OSS train.
Re:Do they need to? (Score:1)
Sure it is, but what's wrong with rewarding the employees with a piece of the pie? It's pretty common these days for high-tech companies. Paying higher wages isn't the answer, since stock has real tangible value to it, and has the ability to make the recipient of said stock very wealthy very quickly.
Why not just pay them back with cash?
Because cash has a stable value (actually, it loses value due to inflation). Stock has the ability to rise or fall, and a company with the press of RedHat will most likely rise. Let's say IBM gave RH $1 million. Now, if you were IBM, what would you rather get, $1 million cash back, or $1 million worth of RH stock? These numbers obv. don't include a ROI for IBM, but hopefully you get the idea.
Re:Bingo. (Score:1)
"NPL
easy as
1
2
3
now you all
work
for
me
"
--
stock (Score:1)
x% of RH stock. Just 'cause it's not publicly traded doesn't mean it's not a corporation.
--
time to buy stock? (Score:1)
is it time to buy into the company? If either goes public they will have to answer to stock holders. M$ could get there paws deep into Linux.
as far as them mentioning KDE and GNOME, both are good, but they both have there bugs. KDE apps don't always work well with none kde apps. GNOME can let a user really screw up the UI if they don't know what they are doing.
It woud lbe nice to see some of these open source projects unite, and form 1 window manager that is ultra lit, and 1 desktop that was super configurable.
yes kde is very configurable, it should make it easier for someone to set up app to launch thru kfm, a nice GUI setup tool. I'd write one but I don't know qt or kde progammin and don't have the time to learn.
GNOME has some nice features, but without a 3 button mouse or 3 button emulation E wont pop me up a menu. I have also been prone to loose the gnome_task bar thingy.
I use afterstep mostly. It is fairly easy to create themes. It is faily light in footprint.
now off topic.....
hey I amentitled to my opinion you don't have to like it. It would just make it easier if there was one standard. I could write an app and it coudl be used by those who like ht e'kde' look and those who like the other looks.
Re:Do they need to? (Score:1)
This is an important point. Right now Wall Street is paying ridiculess amount of money for hightech companies simply because they are cool. In a few years when the internet starts to lose its cool, internet stock falls to the level they should be at and Wall Street starts to do real analysis of high tech companies before buying into them, then stock might not sell for as high.
If RH and VA were to go IPO now they are almost guarenteed to get more than the company is worth just because they involve high-tech, Linux and the internet. In a few years they probably won't get more than they are worth
That's why Raster left RedHat (Score:1)
I think that Mandrake lure Raster into joining him at VA.
_______________________________________________
Re:Do they need to? (Score:2)
True, but this is still the "bail-out" theory. If they have more discipline and enough resources, they can tough it out and just pay them more. Besides, it's not necessarily the employees making the decisions (well, I guess it is, but not necessarily all of them). It's the owners (who, again, happen to be the founders, who are still employees).
2) Netscape/AOL and IBM are going to want their money back. How better to repay then giving them x% of RH stock?
Why not just pay them back with cash? It's an investment. Of course, none of us knows the exact terms of the deals (at least I don't), so they might already own parts of Red Hat.
3) (did I say two?) Buy up smaller companies. Not a real advantage for RH and the technology it uses (since much of it is GPL), but stock swaps seem to be the way buyouts work.
This is a good point, I guess. They would need a lot of capital to buy other companies. I just don't know if that's enough.
Re:Do they need to? (Score:1)
Re:Do they need to? (Score:1)
1) Employees. Oh yeah. They probably have stock options up the wazoo, making many of them probably paper millionaires.
2) Netscape/AOL and IBM are going to want their money back. How better to repay then giving them x% of RH stock?
3) (did I say two?) Buy up smaller companies. Not a real advantage for RH and the technology it uses (since much of it is GPL), but stock swaps seem to be the way buyouts work.
PC Week Rumor (Score:1)
"... Morgan Stanley has been seen skulking around Red Hat Software's Durham headquarters in advance of underwriting the company's IPO, which is scheduled to happen later this year. Another Linux vendor, VA Research, is hellbent on beating Red Hat to the punch as the first major Linux developer to go public..."
Get your contracts out and hope like hell there are stock options in them, you lucky Red Hat and VA Research employees. History holds true, you have a load of money coming your way.
Re:More importantly... (Score:1)
That won't allow you to buy at the opening day price, you need to be an institutional investor with connections at the company handling the IPO.
Let's take a ferinstance. E-Toys (ETYS) sold its shares at the IPO at ~20. The next morning, when open trading (for us regular folks) began, the selling price was 75. A nice 3.5x gain for those who got to buy the first day. It's now 50, so anyone who bought at 75 and hasn't sold yet is in the red, but those early investors still have a 2.5x gain for owning a stock for a week or so.