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FortKnox's Journal: Will VA Survive?? 9

Journal by FortKnox
Quick Note: I know hardly anything about the stock market and stocks. I'm mostly asking questions in this journal for the stock-aware of the audience (gmhowell? Ars-Fartsica?).

Looking at LNUX's stock prices, we see that the last time LNUX broke $1.00 (or hit $1.00) was Jul 1, 02. That would mean, by this Thursday, that a full month will pass since that time. Now, as I understand it, after 30 days under $1, the company is given a warning of its floudering stock price, and have another month (?) to bring it above $1.00 for a full week, or else they get delisted. VA stock is looking a bit grim. $0.30 in a few days seems like a moonshot.

Now, what part of that is incorrect? How does delisting and warning of delisting affect the company? How will OSDN and slashdot be affected if VA gets delisted? Anyone?
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Will VA Survive??

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  • can /. and or OSDN stand on their own? Judging from the ads that I see on /. the answer is no. A large % of the ads are for Animefu (Taco's anime site), SourceForge (VA's product), and Think Geek (another OSDN site). Whate revenue does /. realize from these ads? Occasionally there is an IBM ad in there. I bet that IBM pays real money for those ads.

    Maybe IBM will buy /. on a lark. 8-P

    Do subscriptions cover the cost of serving pages to subscribers? I don't know. When you look at most sites they are plastered with ads. /. is limited to one a page. They seem to have some standards. For now.

  • First, a point that a lot of people seem not to understand is that stock valuation is not the company's bottom line. If the stock price hits zero, the company keeps doing business, its assets still exist and it doesn't magically evaporate. It does mean that the company can't use its stock to buy its way into a more profitable business, which is what LNUX really should have considered when they were in double digits.

    Second, I haven't followed this but my impression was that due to the market collapse NASDAQ wasn't being strict about delisting. Delisting is a big blow to a stock's credibility, of course, but LNUX doesn't have much anyway. I can't believe investors are paying what they are for Sourceforge and OSDN.

    I agree with John Harrison -- how is OSDN supposed to stay afloat if their advertising comes entirely from SourceForge and ThinkGeek? In particular, I don't understand why they switched to the big ad banners and continue to run ads that still give them zero net revenue, but with higher bandwidth costs. (To drive subscriptions?!?) Taco talks about how bad Hemos was when he was in charge of ad sales, but at least Jeff understood that you need to have people give you money! Back then, there were ads from Leatherman, Sun, Penguin Computing....they probably have fewer impressions for paying customers than they did in 1999.
  • I don't know nuthin' 'bout those sorts of intricacies in the stock market. Hell, I was thinking along the same lines as Warren Buffet during the boom: how the hell are these companies going to make a profit.

    In any event, Otter is mostly correct: being delisted doesn't neccessarily mean the company dies. One problem is the lack of value that anything VA does. Sourceforge is of moderate value, but the source is open and available. At least older versions. Savannah might some day replace it in mindshare.

    Freshmeat and Slashdot have absolutely no value. As others have said, their ads are all for other VA sites. I've been wondering about this for a while.

    Microsoft is an interesting idea for a buyout. But they don't fear slashdot or VA, or any of the holdings of the latter. Not one bit. If they did, the place would already be owned by Bill.

    The more interesting thing is what happens when VA finishes its cash burn. We don't know. Because we don't know what the terms of the sale of slashdot to Andover were. Is there an escape clause to allow CT et al. to get the site back? Only a few people know.

  • The rules are:

    If a national market security's price falls below US$1 and stays there for more than 30 days, it is delisted. If a Small Cap security's price falls below US$1 for more than 30 days OR their stock market value drops below US$35 million or their annual profit drops below US$500k, then they are delisted.

    Delisting simply means that they have to trade on the over-the-counter (OTC) market with all of the other penny-stocks. The difference is that the big brokers (Morgan Stanley, Behr Sterns, blah, blah) won't touch you, so you won't move big volumes and get invited to the big broker parties and stuff. As someone else pointed out, it doesn't mean your company is going down, just that the market thinks it is. :)

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