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Transmeta

Transmeta Files For IPO 115

Posted by Hemos from the it-was-inevitable dept.
Richard Finney writes "Reuters News Sevice is reporting that Transmeta is filing for an IPO." They are looking to raise $200 million - the rest of the details are sketchy.Update: 08/17 09:59 PM by H :Check out the FreeEdgar filing.
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Transmeta Files For IPO More

Transmeta Files For IPO

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  • Put off by IPOs? Transmeta == infrastructure. (Score:4)

    by Money__ ( 87045 ) on Thursday August 17, 2000 @11:56AM (#846852)
    Most people in this 21st century, are educated enough about trying to invest in a .com and look for "infrastructure" companies instead. Sun and Cisco are 2 prime examples of companies that have done very well when investors follow this path. Investing in a company that has something truley of value and, services the hell out of they're customers is more likely to return very handsomly in the long term (in internet years, long term = 1 year).

    Transmeta has the right tech (high powered yet *low* powered chips in the handheld market). Transmeta has the right patents (code morphing, long run) but what remains to be seen is weather they can do that last very important thing. Service the hell out of their customers.

    Can the fab line scale? Will the patents be challenged? How will they respond to Intel dumping dragonballs into the market?

    These are all questions that remain to be answered. For me, I have to say, if they're smart enough to hire Linus, they're smart enough for me.

  • OK, reality check time.

    You might get the Transmeta letter (if there is one) if:

    1. you are listed in the source code for some major open source code
    2. you are listed in the source code for the Linux Kernel
    3. you are listed as working on the .man files
    4. you are listed as working on the howto
    5. you have done really cool stuff to help Transmeta
    6. you are a Linux demigod

    Since it's only S-1, you still have time to get listed. So join up and get cranking!

    Note: I have no insider connection, I'm just basing this on the other IPOs. For all I know they'll just stiff you and you'll have to subsist off the free bheer like you're supposed to.

  • The capital needs could very well a sign of success. From what I've read, Transmeta has quietly been winning approval from a broad array of very large system manufacturers. This takes time and can't be done before there are real parts to evaluate.

    Once the big guys are ready to go, however, Transmeta will needs lots of cash to finance the wafers coming from the fab. It takes money to make money...

  • Paul Allen invested in Transmeta privately... not Microsoft.
  • They could save money by printing thier stock certificates on the back of DrKoop.com certificates.

    -B
  • Oh, that's assuming you didn't change your email since then. If you did, maybe you should fine tune some of your code real soon, eh?

  • Paul Allen owns Vulcan Ventures privately; its only relation to Microsoft is Paul Allen himself. Claiming Microsoft owned a part of Transmeta would be like claiming Apple owns a part of Pixar.

    It's not very surprising that both Paul Allen and Bill Gates are slowly but surely moving their assets away from Microsoft stock. Paul Allen has chosen the venture capital path while Gates has become the biggest philantropist in the US via the Bill and Melinda Gates Foundation.

  • Well, I know Transmeta isn't a company based around free software. And I know they don't have to.

    But: I think they will, if only for the Open Source buzz they'll get and the subsequent media attention. Never underestimate the power of free advertising. Just watch those servers drop under the /. load when they mention TMTA and the media will suddenly decide the stock IPO is Red Hot. Which is where the institutionals who make up the current BoD can make the moolah, in selling to all the stock wannabees who try to follow the buzz.

    Call me cynical, but I make money even when the markets drop.

  • I really don't think that companies should be filing for an IPO just to get out of debt, in fact I think that I'd be more comfortable investing in a company that has historically made some money, not lost it

    One of the big reasons a compony goes public is to get some working capital to make investments (factories, expensave talent, marketing blitz) that will make an even bigger profit. A profitable compony frequently has less reason to IPO then a not-so-profitable one. One of the other big reasons is because tipically Venture Capitalists get to make some of those calls in exchange for money when the compony really really really needs it (like to go from a literal garage start-up to a underfunded low-rent office park start-up; or to go from "I got an idea!" to "It works in the lab!").

    As for investing in a compony that has made money, well that doesn't mean they will make more in the furure. More importantly, it doesn't mean it will make more money then people are currently betting on which is what stock value really is. You would rather invest in a compony that is about to make a lot more money then people think it is. Maybe one that is just shipping a product that really is as good and revolutionary as people say (it's a good excuse to buy products the day they hit the market -- to check for good stock investments...a lession I should have learned with the Zip drive, and applyed to the AMD K7!).

    P.S. I am not a profesional. This advice may lose you money. I'm not responsable. The risk is yours. Blah blah blah.

  • 1] the strongarm has lower power consumption than the crusoe. its good for webpads.
    2] Lots of webpad stuff is coming out with strongarms and ibm/sony/gateway will also be trying AMDs new power saving stuff which is pretty close to transmetas....and is proven x86 compatible as opposed to this brand new chip with its weird architecture. plus AMD owns fabs.
  • Do you realize how much power the Itanium uses? The batteries in a laptop would last 5 minutes, assuming the whole thing didn't melt.
  • Usually it ends up being somewhere between 20 and 40 percent offered up in an IPO. They need some for liquidity for the second (followup) public offering, when they have to get more funds, and some for the workerbees that get options. Plus more for the exec compensations and bonuses.

    Figure the institutionals will bleed off a small fraction as time goes by, so as not to kill the market. That's why when you buy pre-IPO they want you not to sell - so they can.

    And the lead underwriters all get to hold nice chunks. Some will go to the institutionals (Vanguard, Janus, Fidelity, whatever). Some will go to corporate buddies/clients. Some will go to their best customers (me). Some will be used to provide liquidity in the market for the float, so that trade is more regular.

  • the current owners didn't absorb the losses, the company did. When you put money into a company and get stock in exchange, it's not your money anymore, just like when you buy a car or a bottle of milk.

    And, the company absorbed the losses by spending the money. They are going to need more money for spending in the future. Even profitable companies need money to finance growth: that's why a company like Microsoft constantly sells more shares.

  • First of all, Andover had a much closer tie to Open Source, and didn't do a letter. If anyone would abuse buzzwordability, they would. Out of all the companies to IPO recently, and with ties to free software, only Red Hat and VA have done it. Secondly, right now, the market is quite leery of Transmeta. They're heading into the second hardest market to penetrate (Intel chips), right after operating systems. (Don't try to tell me they're not marketing Intel chips. That's all they have for the forseeable future; right now they have nothing). It's not easy to get in, it's harder to do well, especially with a) No other products, and b) Gimmicks (like "code morphing" [Without compiler!] and low wattage), instead of real advantages, like speed or cost. Call me cynical, but I don't see a future for Transmeta, in the market or out.

  • What does slashdot think (Score:3)

    by Anonymous Coward on Thursday August 17, 2000 @04:20PM (#846866)
    about this:

    We rely on a combination of patents, copyrights, trademarks, trade secret laws and contractual obligations with employees and third parties to protect our proprietary rights.

    Still support this company, just because Linus is on board, right? If it were any other company that declared this, everyone here would be up in arms like "boycott them! i hope they go out of business" yada yada yada...
  • Similar to ARM is what you should have said.
    It looks like Transmeta's technology is the first thing to be able to look ARM straight in the eyes finally.
    It's a shame for Transmeta that ARM has been an established product for 10 years, and has its core licenced by probably half of the other big chip manufacturers.

    FatPhil
  • A deficit is not debt. It doesn't have to be paid back

    your post does a good job of explaining the bit about a deficit, but it also contains a nuanced error of its own:

    Corporate debt mostly doesn't get paid back, either. Yes, bonds are retired when they mature, but they are generally paid off with money raised by issuing new debt. From the company's perspective, the debt did not decrease: the debt essentially never gets paid back. In fact, company's generally increase the amount of debt they carry as they grow.

    Most people are used to personal debt so this can non-intuitive. Personal debt represents a shift of future income to the present. You want more than you can afford now so you borrow, but in the future you'll be able to afford less. Corporate debt is a different matter. It represents "ownership" of the company just like shares of equity do, more precisely "subordinated ownership". Because it has lower risk than equity and the interest paid is less than the returns that shareholders expect, debt is a cheaper way of raising capital for companies. Because interest paid is tax deductile (e.g. subsidized by non-owning taxpayers), it is an even more desirable form of ownership for the other shareholders.

    as to the error about the shareholders absorbing the loss... I correct that in a separate post.

  • PitImp,

    Your signature rocks, but you still suck at Magic.

    SamBecket
  • I guess if Intel is dropping them on the market they arn't the Chipset so... I'd go running for cover when those Dragons come looking for the wise guy who did this
  • Transmeta isn't really a "linux company". They are not like Red Hat or other companies that are centered around linux and need to score points with the community.

    Linux is just one of the operatings systems they plan to run on their devices.

    There's also that Linus guy, of course... :-)


    ----
  • 1. If they do send "the letter", read it and jump for joy. Then send in your money to buy the shares.

    2. Watch all the yuck-a-puck daytraders make the stock "pop". Then SELL ALL YOUR SHARES, thus making a huge profit.

    3. Wait for the stock to settle down and pass the "lock-out" period.

    4. After the lock-out you will likely have at least one or two opportunities to buy the stock for close to, or perhaps even less than the IPO price. At that point, decide for yourself whether or not the company has a future worth investing in.

    You see, my way is better because you make a huge quantity of money, AND you get to buy the stock back at a low price...

    How did the other guy get modded up?

    -thomas


  • Actually, if you go looking for it, you'll find that the symbol is most likly going to be TMTA
  • With a quick overview of the Edgar filings, I get the distinct feeling that the management is not gunning for success.

    They are taking quite reasonable salaries, generally if they were hopeful, they would take less income and more stock options. Also, they have borrowed quite large amounts from the company: 5 people or so each took $750K out.

    I smell trouble. Crusoe and the Codemorphing engine may be great products, but unless they can sell it and give the buyers some confidence in the continuity, then, uh oh!
  • I hope their IPO doesn't get /.ed

  • Re:Raising Money to pay off debt (Score:2)

    by Anonymous Coward
    A deficit is not debt. It doesn't have to be paid back - it is a loss coming out of the current owners' deep pockets. Don't cry for Paul Allen et al, not only can most of these investors absord a puny loss like $119 million, but once Transmeta goes public (only 10% or so will be in public hands) but they will increase the value of their paper investment many times over what they have so far contributed.

  • Re:IPO Obsession (Score:3)

    by Jeffrey Baker ( 6191 ) on Thursday August 17, 2000 @12:15PM (#846877)
    You answered your own question. A venture-funded tech company is expected to become publicly held in not-too-much time. When the venture partners are major staeholders in your company, there can be a lot of pressure to get the IPO out the door.

    Also the wild stock market gyrations are irrelevant. Once the stock has gone out the door, the company has made its money. The capital is already raised, regardless of whether the stock roller-coasters, or tanks, or stays level.

  • This message is solely targeted at the people who say things like "why now when the market is so unfavorable" or "what about all the other recent failtures"...

    Learn something about the stock market before pretending to have some knowledge of how it really works. There are tons of IPOs all the time. You don't hear about most of them. Many of them do exactly what they intended to do and raise the amount of money intended. Just because you read about a few bad computers ones here and there don't assume this applies across the board. To those who would say that its not a good time, when is? tmrw? the next day? yesterday?

    Basically it comes down to this. Don't believe the hype about how bad it is to IPO right now, most companies that say that don't have a solid foundation to IPO on and were using current popularity in buying trends to make their money.

    ---
    Solaris/FreeBSD/Openstep/NeXTSTEP/Linux/ultrix/OSF /...
  • It prolly means our fearless leader will soon be our *rich* fearless leader.
    --
  • You seem not to grasp the purpose of going public. Perhaps they have already tapped about all the private capital they can and now need to go public to raise more which would allow them to continue to function, distribute, etc. It's much trickier now than it was last year (before tech investors opened their eyes), but Transmeta does have one thing going, a viable product with OEMs lining up. A good sign.

    Pre IPO doesn't hold the romantic vision of instant wealth it once did, now filings for IPO meet a critical eye. Which can be a good thing, as smarter investors are less likely to turn tail and run when the rest of the market hiccups.

    Vote [dragonswest.com] Naked 2000
  • I'm not sure if this is a wise decision, they have only one product to speak of, and the market seems weary of new tech stocks. Although, they actually have a product, unlike some IPO's which are based on vaporare entirely. Some of those are now collasping. It'd be great to see Transmeta stock soar and make some more millionaires out of some humble linux folk.

    ---
  • Kind of funny to think in a way that Microsoft owns 7% of Linus Torvalds Paycheck

    WRONG. paul allen's vulcan ventures owns 7%, not microsoft.

    I don't understand completely how IPO's work

    then don't comment on them.

  • This seems like an attempt to be the next "Red Hat" stock phenomena, a.k.a. Overvalued Stock!

    Not that I have anything against a stock going over $200 per share before a significant market develops.

    If money grew on trees, catepillars would ride to work in limos.

  • Re:Well, it would be nice to have a shipping produ (Score:3)

    by SuperKendall ( 25149 ) on Thursday August 17, 2000 @12:31PM (#846884)
    Even if you don't believe in the Code Morphing technology, they have two other big things going for them:

    * Much lower power consumption. If you have two laptops, where one can get 10fps more out of Quake but the other one can go twice as long on one battery, which do YOU think will be more popular? Most people just want to be able to work. My personal mark for a usable laptop is 12 hours.

    * Sony and IBM making lapops based on Transmeta chips. With products from companies like these, how can they loose?

    The only wildcard in my mind is production. Can they produce chips fast enough to fulfil demand? I personally believe they can. Simply dismissing them because they have slower processors is totally ignoring the market segment they are aiming for (of which laptops are the high end in terms of performance!).
  • In addition, we can expect they will ship another chip either just before or immeadiately after the IPO, to give it a good kickstart.

    It's all marketing and expectations - thats why Bill G is worth way more than thee or me.

  • Thank you for pointing this out.
    Correction: StrongARM is the Intel owned product I was thinking of.
  • Wait, Dragonballs are made by Motorola, aren't they??? Why would Intel be dumping them???
  • Like I said, I got the VA letter. I didn't get the Red Hat letter. I meet _none_ of those, I write a bunch of small utilities and manage some web sites.

    I'm not particularly caring whether I get the letter or not; I'd rather not, because if I don't get it, someone who has done more than me probably does. I'm just surprised everyone assumes that two companies doing it means every company will.
  • It is also very cheap to incorporate in Delaware.
    ---
    Solaris/FreeBSD/Openstep/NeXTSTEP/Linux/ultrix/OSF /...
  • ...not customer service.

    The simple point with Transmeta is this - can they make a better processor than Intel?

    Better means many things, cooler, faster, cheaper...whatever the public is obsessing over at the moment. Customer service really isn't an issue for Transmeta (I presume you are simply parroting some drivel from Business 2.0 or some other rag here), no more than it is for AMD and Intel.

    Every indiciation is that Transmeta has a cute product but Intel will be able to come within 10% of each of their quantifiable attributes. In the short term this means Transmeta needs to market directly to companies looking to get out from under Intel's thumb, and even then, this is only going to get them in the door. They need to be able to demonstrate that there is a real reason to have a Transmeta chip inside a unit instead of an Intel one. If Intel can beat the power consumption problem (they have indicated they can, and quickly), Transmeta could be in for a rought ride.

  • Some Advice. (Score:5)

    by istartedi ( 132515 ) on Thursday August 17, 2000 @02:05PM (#846891) Journal

    1. If they do send "the letter", tear it up and throw it away.

    2. Watch all the yuck-a-puck daytraders make the stock "pop".

    3. Wait for the stock to settle down and pass the "lock-out" period.

    4. After the lock-out you will likely have at least one or two opportunities to buy the stock for close to, or perhaps even less than the IPO price. At that point, decide for yourself whether or not the company has a future worth investing in. Be sure to base this decision on your knowledge of the market and the competition. In this case, that means knowing a lot about Intel, Motorola, Xilinx, and other chip manufacturers.

    Another good thing about this approach is that you don't have to buy some minimum alottment or conform to any rules about when you take a profit. If you only want 50 shares, then that's all you have to buy. If the stock jumps on some analyst's recommendation, you can cash out without having to worry about being barred from future IPOs.

    The real beauty of this stategy is that while all the other fools are riding over the IPO hill and crying their eyes out on Yahoo message boards, you can put your money someplace else where it will really work for you.

    Of course, if you are a Type-A "I lost 20k yesterday and it doesn't bother me" cocaine snorting day-trader, you can ignore my advice. Don't blame me if this advice doesn't work for you, and don't blame me if you drop dead from a heart attack at 40 either.

  • where can I buy an x86 strongarm laptop?
  • One of the big reasons a compony goes public is to get some working capital to make investments (factories, expensave talent, marketing blitz) that will make an even bigger profit.

    you're not using "working capital" accurately. Factories are long term investments. Working capital is short term.

    The need for short term capital comes from the time delays between when Transmeta buys silicon, and when their customers pay them for the chips, a matter of a few months. And, when a company is growing, this payout is ahead of the income on the growth curve, so the amount of working capital required continues to grow.

    Companies go public when their need for capital of all kinds exceeds the amounts that individual investors or venture capitalists are willing to raise. There are large private companies, but if they have an aggressive plan for growth, they generally need to go public. Most investors don't have a steadily growing stream of cash to keep pumping in.

  • Fear not oh ye of bitch-slapped fame.
    I browse at (-1,Nested). I see you.
    Those of you that don't browse at (-1,Nested) are not getting the whole picture.
  • MSDW => Morgan Stanley Dean Witter, the firm underwriting the offering. They're also the company behind the Discover Card, if I remember right.

  • 2. Watch all the yuck-a-puck daytraders make the stock "pop". Then SELL ALL YOUR SHARES, thus making a huge profit.

    If you were here for the last round of discussions concerning "the letter", you would know that this is called "flipping your stock". It is unethical (though not illegal) and can prevent you from participating in future IPOs, and will certainly damage your reputation on Wall Street, assuming that they keep a record of such things.

    If Wall Street didn't frown on this, then LinuxOne type companies could float stock. They would send letters to their partners who would flip the stock and kick back the profits. Then they would fly off to South America leaving lots of investors holding worthless paper.

  • the rest of the details are sketchy (Score:2)

    by Anonymous Coward
    It's transmeta, what else is new?
  • The 'insiders' will get in at $18.
    Trading will open at $45+
    First Day runup will be to $80+.
    High point will be in first couple weeks.
    Now guys - lets remember: DON'T GET GREEDY. If you've made some good money, sell when the price is up. This stock is no different than any other hyped ipo. Money is there to be made, but the excessively greedy get burned.
  • It's not as simple as "tilted in favor of corporations." The point is that it's all been litigated so much in Delaware that the answers are well-known, and the courts are well-trained. Companies don't particularly care how things are tilted any more than anyone else cares. But they do care a lot about uncertainty. It's much easier to run a company when you know what is required, what are the regulations, etc.

  • Most of the battery consumption of a laptop comes from the screen and associated video drivers.

    Most of the rest comes from the hard drive.

    Anybody familiar with performance profiling will instantly recognize that dropping the CPU power consumption to exactly zero will not make a huge dent in the cumulative result.

  • Transmeta is great and all, and Crusoe seems really cool. But I do think they should at least wait until they have a proven, shipping, mass market product before moving forward.

    This is protection, if nothing else, for their employees, who are going to have to rely on Transmeta's success, not the day of the IPO, but months and often years later.

  • I'm going for as many TMTA shares as I can
    Note: I own MSDW stock
    And even though my initial $51K that was in E*Trade never got put in

    (Rest of coke-induced ramblings deleted)

    I'm sorry. I think you have Slashdot confused with someone who gives a shit, like the Motley Fool. If you're going to drone on about what a clever investor you are here, please at least explain your acronyms.

  • Why must every venture capital startup immedietally apply for IPO without actually establishing a market for its wares yet?

    Transmeta may be cool and have potential, but do we need to wreck the market with yet another volatile stock thats going to go up 100 points in the first day and then drop back to its original price?

  • They already have a product that's ready to go out the door, and with IBM microelectronics behind them there should be no problem getting what they need. IMD rocks. www.chips.ibm.com

  • I think transmeta is a good company (or at least A good idea), but how wise is it to go with an IPO when so many other "hot" IPOs have gone south. Two or 3 years ago, it would have made tons of cash, but will it be able to with people being so put off with IPOs. Other companies have held off on putting out their IPOs due to this.
  • This was the first post that had anything to do with the article. It'd be awfully hard to be redundant in that position. If you don't know what one of the moderation terms means, look it up [dictionary.com] before using it against people.
  • I wonder if the uptake on Transmeta's products has been slow enough that their venture capital is drying up.

    Also, I hope a "mere" $200 million IPO doesn't make them vulnerable to take-over by certain other chip manufacturers...

    Is all their secrecy a sign of great things coming soon, or are they more smoke than substance?
  • the rest of the details are sketchy

    from the company that should be called TransEnigma; how surprising


    ------------------------------------------
    the amazing bc
    latin/funk flugelhorn & trumpet
    webnaut, music junkie, sysadmin from hell
  • If you were here for the last round of discussions concerning "the letter", you would know that this is called "flipping your stock".

    Actually I wasn't here, but I am well aware of stock flipping on IPO's. It doesn't matter, though, for most people, because you'll likely never get a shot at a good IPO again anyway! The numbers are against you. If you do get a shot, you might as well flip it for all it's worth.

    It is unethical (though not illegal) and can prevent you from participating in future IPOs, and will certainly damage your reputation on Wall Street, assuming that they keep a record of such things.

    Wall Street doesn't give a damn. The firm that is underwriting the stock DOES, and thus if a large portion of E*TRADE'rs flip stocks, E*TRADE gets less stock in the future (supposedly). Thus E*TRADE wants to limit flipping, and they impose "sanctions" against flippers.

    They would send letters to their partners who would flip the stock and kick back the profits.

    Except employees can't just sell the stock whenever they want to, they have to file with the SEC, etc. It's entirely different.

    Who do you think does the majority of "flipping" on the first day of trading for an IPO? HINT: It's not the little guys like you and me. It's the bigger fish.

    -thomas

  • Remember when Red Hat went public and all sorts of people got "the letter"? As I recall, a large number of them found out they couldn't actually act on it. Who among us might qualify for "the letter" with Transmeta, and more importantly, will they be able to take advantage of it?

    -TBHiX-
    I may be motley, I may be a fool, but am I a Motley Fool [fool.com]?

  • ...of all the other High-Tech IPO's, where the company's stock price soars despite the fact that they have never made a buck. Think that'll happen to Transmeta? Only time will tell...

    Martee

  • Re:Well. (Score:1)

    by jjr ( 6873 )

    >Stacked up against the G3, Crusoe looks pretty sad

    The point of crouse is it can run application allready out there with out a recompiling it.
    Have decent performance and low power requirements

  • Wow (Score:1)

    by .sig ( 180877 )
    I certainly didn't see this coming! Sometimes I thing our generation will be know for it's (premature) IPO's.
    Of course, I'm very interested in their processor (I considered designing a simple VLIW processor as a senior project a few years back, in fact), but it just seems like we're being flooded by these things every day...
    well, good luck to em anyway :-)
  • Humble? The Transmeta dudes made their product seem like the second coming of Christ...
    --
    Chaosnetwork [chaosn.com]
  • C|Net article: Transmet a starts shipping its chip of choice [cnet.com]

    Interesting how Slashdot announces the IPO but not the shipping of actual product. My, how what "matters" to nerds has changed in a year!

    Now hiring experienced client- & server-side developers

  • my bad...5600, not 5400...

    Now hiring experienced client- & server-side developers

  • The larger part of an IPO is raising capital, and they need it. They have a heavy debt load and a product. How many companies have done an IPO with only the former?

    Transmeta is in a transition period, and it is a risk to buy. If you think it is too much a risk stay away, this is a financail decision for the individual investor. However there are many who will think the risk is low compared to others that have taken in the past 36 months.

    If provided the capital Transmeta might create a foundation from which the concepts and prototypes could have an impact on the market. If so, those who invest will be rewarded. If not, they are punished. Isn't capitalism great?

  • Some of Transmeta's biggest investors include Microsoft Corp. (NasdaqNM:MSFT - news) co-founder Paul Allen, whose Vulcan Ventures investment vehicle currently holds a 7 percent stake equal to 3,954,333 shares.

    I guess the Microsoft port article distracted everyone... Microsoft made a huge investment in Transmeta too. I wonder if that's going to effect anything at all... Kind of funny to think in a way that Microsoft owns 7% of Linus Torvalds Paycheck :-)

    Anyways, 7% isn't too much, but that's still quite a chunk. I don't understand completely how IPO's work, but it does look pretty strange :)

  • Why not just "YHBT [yhbt.org]"? It'd be funny to watch how few investors would pick up on the name.

  • Thank god it's MSDW listing TMTA! (Score:4)

    by WillAffleck ( 42386 ) on Thursday August 17, 2000 @12:50PM (#846920)
    Well, I'm not just saying that because of what happened with Red Hat. As some of you may know, I and some others pounded on ETrade when they didn't release the shares for the coders promptly, even getting the SEC into the act. And even though my initial $51K that was in E*Trade never got put in (I did get 100 shares, though), I'm not really complaining, even if that was a lot to have sit in cash for weeks.

    When we look back at all the Linux stocks, we'll see very few did well - Red Hat (marketing is why, brand is big), VA Research (now VA Linux Systems, mostly the quality rep), and not much more.

    Don't be distracted by the huge first day pops - that's the institutionals letting out the air and the hype factor. If you can get IPO shares - great! If you can't - wait at least 90 days to buy them - best times are 90-100 day and 180-210 day when the option lockups expire.

    And if they send you an email saying you should get shares, don't take no for an answer. Send in the cash, take your allotment, and ride it for all it's worth. If you get a few hundred shares, consider dropping 25 to 100 of them during the first week to cover your cost, and then keep the rest until you retire. Don't worry about warnings about not selling - that's only if you do IPOs all the time. I've been restricted from IPOs a few times, when I dropped a hot IPO for a good 300 to 600 percent return and never regretted it.

    Note: I own MSDW stock (a major chunk of my portfolio, and a great stock) and I'm going for as many TMTA shares as I can get in my large MSDW account. Remember, if you are friends and family, you don't have to jump through the same hoops as everyone else. And if people mess with you, the SEC is your friend.

  • You should give him credit. ;)
  • Dr. Acronym wrote:
    YOU too can make hundreds of millions of dollars in days by starting a company and going IPO without even shipping a product!

    The Dr.'s comment was modded funny, but it's true. Observe this discussion list for overvalued stocks [siliconinvestor.com]. T$ will be on there...several months before it tanks.
  • I don't understand. If the current owners can easily absorb the $119 million current debt, why don't they just plunk down another $200 million and keep all the profits for themselves?

    After all, the people running up the value of the stock are doing so with the expectation that Transmeta is going to be making buckets of cash. So why sell any of the company unless you have to?

    (confused)

    Torrey Hoffman (Azog)
  • yet another volatile stock thats going to go up 100 points in the first day and then drop back to its original price

    Why would the employees/owners of the company care? They're the ones with the stock options, who'll make a mint, and everyone else will be left carrying the can.


    The employee's/owners care because there's a "lock up period" after the IPO where insiders (pretty much anybody having stock options) can't sell their stock. This is usually about 180 days after the IPO date. Then the options still aren't tradable until they're registered with the SEC (and when that happens tends to depend on whether or not TPTB think the employees will dump their options thus driving the stock price down or not).

    I was lucky enough to get invovled with a pre-IPO company for 40k options at $1/share, watching it's stock price go from about $8 to almost $50, then drop to the $5 mark before the lockup was up.

    Did I sell? yep. And glad of it too, the stock's been dropping into the $2's lately.
  • But that's what they're doing. Paul Allen & Co. will own stock in the company, and they'll be paying less than 1/10th of the "retail" price.

    Think -- who owns the stocks before they're flogged on the open market?

    Right: the insiders. The VCs. The employees who took stocks in lieu of cash.

    Who sells the stocks once the IPO happens?

    Right, the private investors. For a significant multiple of what they originally paid.

    The "people running up the value of the stock" are the people who own pre-IPO shares. It's in their very best interest to hype the company as much as possible!

    Paul Allen won't come out hurtin', that's for sure.

    --
  • among other reasons: liquidity give the company an acquisition currency give customers a sense of confidence in the survivability of the company (would you develop for/buy Intel chips if they were a private company?)
  • You're supposed to file for IPO before you release a product, not after! They should have been just like every other dot-com and done this years ago. It's IPO, then debt, not the other way around.
  • There is a real explanation, not a conspiracy. Delaware Chancery court is set up to handle corporate litigation. It has specialist judges, specialist courts and all the necessary infrastructure. This gives investors confidence that they know what to expect in the event of litigation. That is why 95% of Fortune 500 are incorporated in Delaware. Other states have enacted more generous laws (toward the corporations) to try and attract companies. It hasn't worked.

  • Those are good points. I see another possibility, though... that is, battery technology will improve at a fast enough rate to make Transmeta's extremely low-power CPUs not so neat anymore.

    I think there will be a short period where their products will fill a valuable niche. But before too long, we will have new exotic power sources for laptops, and laptop makers will be able to stuff power-hungry chips back in. And at that point I will happily take the extra 10fps in Quake 3. :)
  • Generally speaking the insiders can't sell their stock at the IPO. Usually, the stock sold at IPO is registered specifically for the IPO (i.e. the company passed a motion to create more stock for the IPO).

    Most of the time it's not considered a good idea to let the people on the inside sell out as soon as the stock is valued and sellable. That's why there's usually a lock out period (180 days or so). If I had been an insider at VA and could sell the day it went IPO, I'd have been sorely tempted to sell everything, take the money and take the next 12 years or so off. That's the reason the investing community usually requires that insiders not be able to sell immediately.

    Actually this gets even worse if you're a knowledgable insider- then you're pretty much required to file stating that you're going to sell, and until that filing takes place, you can't.
  • I've noticed a few comments about *the letters* that went out for the Red Hat IPO and letter recipients inability to participate with e*trade. Looking at the Transmeta's IPO information [ipo.com] it doesn't appear that individuals will be invited to participate in the IPO. The lead underwriters of the offering are the *Big Boys* of investment banking - Morgan Stanley Dean Witter, Salomon Smith Barney, and a few others. No mention of any "e-" company involved with this deal.

    You can't really compare this to a .com IPO. This company is actually selling something tangible. It appears as though they should actually make some profit once they start selling something.

  • MSDW? (Score:2)

    by Anonymous Coward
    Microsoft Does Windows? Why do all you stock freaks call a company by their stupid ticker symbol. It doesn't make you sound more intelligent, merely a fucking geek without a life. As for sitting on $51k.. BOOHOO. My heart bleeds for you. If I had $51k in cash I'd be fucking rich and wouldn't sit there complaining about it. you fucking people are too greedy.
  • Actually, Microsoft regularly buys back shares. They also do regular stock splits, but this doesn't raise any more money for the company. It's merely done to keep the price of a single share at a reasonable level. Regularly issuing new offerings devalues current stockholder value, which, btw, is the best way to get yourself fired.

  • Questions to ask before you invest in Transmeta (Score:3)

    by miniwookie ( 131560 ) on Thursday August 17, 2000 @06:49PM (#846936)
    1. Whats your tolerance for risk? (This company has burned almost 200 million already and they need more to ship their first product. Given Moore's law they will need to release a new product sometime in the next 12-18 months. 2. Are you buying stock because you like Linus, or are you buying an investment you expect to return money? 3. Are you paying a too much of a premium for this company because of the celebrities invovled (Linus, Paul Allen, etc)? 4. Semiconductor stocks have had a pretty good run up in the last year, but are they peaking?
  • Also, I hope a "mere" $200 million IPO doesn't make them vulnerable to take-over by certain other chip manufacturers...

    Unless they release (or whatever the correct term is) over 50% of their shares (highly unlikely), I doubt they would be a takeover target.

  • I'm probably the only one who subliminally read "They are looking to secretly raise $200 million" into the story. Transmeta just has that effect on your brain.
  • > they should at least wait until they have a proven, shipping, mass market product before moving forward.
    You don't seem to understand what it's all about. It's about making money, as much and as quickly as possible. So why are they going for IPO before even shipping a product? Because they know they'll get less money after shipping their product because people will see then that their product is about as revolutionary as the latest i386 clone from Cyrix.
    Seriously, didn't anyone notice how lame everything has been we've heard from them up to now? "We'll ship some 400 MHz processor some day ... errr ... real soon now... and after that ... a 700 MHz processor!" Wow! And all real information they gave was some OBVIOUSLY manufactured performance test. And even with that manufactured thing they couldn't really make it look cool.
    Face it, the only "cool" thing about Transmeta is one of their employees, and once they start shipping something people will realise that the big name of one employee alone won't make money.
  • LNUS INTC2 VAPR LOJUCE MNYPIT

    anyhow, i hope they do great.

  • Re:Are they running low on funds? (Score:3)

    by Nexx ( 75873 ) on Thursday August 17, 2000 @11:49AM (#846944)

    I wonder if the uptake on Transmeta's products has been slow enough that their venture capital is drying up

    Well.... The uptake on the products doesn't have to be slow. They merely need to appear slow. Just look at 3dfx about a year ago. They almost lost all of their venture capital for R&D, because their VSA-100 seemed slow. In retrospect, we know that had they shipped their products in time, the Voodoo[45] series would've been among the fastest product out there. Of course, they survived, and has seemed to get the product cycle headaches sorted out to an extent (or have they?).

    It doesn't matter how good the company performs in the good times. It only matters how well the company survives when the times turn sour. All companies, large and small, had to go through this phase. If Transmeta is indeed hurting for venture capital, it just seems that they're going through the "growing pains" sooner rather than later.

    Of course, this also may be a bid to increase their cash reserves so they can seriously invest in something infrastructure-related. $200million won't buy you a fab, but possibly some space in one? They've been having issues with IBM's fabbing costs, and they've been courting TSMC and others, but perhaps they want to do it on their own?

    Of course, the yahoo listing was full of the usual drivel; claiming that the Crusoe processor "gives laptops Internet access performance similar to that of desktop computers". A 1GHz T-bird will be slower than a 300MHz PII if the PII had been mated to a T3 while the T-bird was connected via a modem. *sigh*


    --
  • What, several demonstarations by companies such as Toshiba, Dell, Compaq, etc, and products scheduled to ship this year aren't good enough for you?

  • What is the deal with Delware? (Score:3)

    by _Stryker ( 15742 ) <[gro.xobxunil] [ta] [naes]> on Thursday August 17, 2000 @01:05PM (#846948)
    From the filing:
    We were incorporated in California in March 1995. We intend to reincorporate in Delaware prior to this offering.

    Why is it that so many of these IPOs reincorporate in Delaware? Is there something intrinsic to the corporation laws in Delaware that makes this desirable?
    ---

  • Re:Are they running low on funds? (Score:2)

    by Anonymous Coward

    No one likes to read the Edgar filing?

    Hmmm. $157 mil in Assets. Current burn rate at $43 mil per last 6 months.

    We intend to significantly increase our product development, sales and marketing, and administrative expenses.

    Translation: Got cash. Shipping product. Work on the next chip generation, beef up marketing, and hire a bunch of new people to support operations.

    60 mil shares outstanding x $20/share = $1.2 bn valuation. That's assuming 10 million shares sold to raise the $200 mil.

    Should be an interesting IPO...

  • Re:Put off by IPOs? Transmeta == infrastructure. (Score:4)

    by Snocone ( 158524 ) on Thursday August 17, 2000 @01:10PM (#846951) Homepage
    How will they respond to Intel dumping dragonballs into the market?

    Probably with slack-jawed incredulity, same as I would, since the MC68328 'DragonBall' [apspg.com] is not an Intel product [apspg.com]...
  • Well, I wouldn't count his stock options before they're exercised. Remember, the figure they usually quote is the closing price for the first day, and then sometimes the closing price for the first week, when they talk about how much he'll be worth.

    But he probably won't be able to exercise his options until at least 90 days, and if he has significant holdings, maybe 180 days. They might grant him an initial exercise of say a few thousand shares just so he can finally pay off his student loans and get that new Hybrid VW Beetle with the 90 mpg that he wants.

    And even then, if he gets significant holdings, he has to file notice of intent to sell them, so we can track his holdings on Yahoo and figure out when his mortgage comes due.

  • Re:What is the deal with Delware? (Score:4)

    by owillis ( 74881 ) on Thursday August 17, 2000 @01:14PM (#846953) Homepage
    Delaware doesn't charge corporations taxes and has a lot of laws that are titled in corporation's favor in regards to litigation.
    --
    Chaosnetwork [chaosn.com]
  • yet another volatile stock thats going to go up 100 points in the first day and then drop back to its original price

    Why would the employees/owners of the company care? They're the ones with the stock options, who'll make a mint, and everyone else will be left carrying the can.

  • Here's a nibble for the troll. (Score:3)

    by Inoshiro ( 71693 ) on Thursday August 17, 2000 @08:55PM (#846959) Homepage
    Except that patents are meant to protect small startup companies while they form a market share over a period of time.

    Patenting the ability to set a cookie, OTOH, is a bit different from a genuine new way of "morphing" the ISA of one processor into the ISA of another (especially going from CISC to VLIW!), and in such a way that is actually saves power.

    Again, it's the "one of these things is obvious, one of these things is not" and the "this company is small, in debt, and being eyed by the the larger companies," versus the, "lock out the competition by patenting a common practice" method of business. Patents do have a real, useful purpose. Why do you think they were made in the first place?
    ---

  • Re:What is the deal with Delware? (Score:4)

    by SEE ( 7681 ) on Thursday August 17, 2000 @09:14PM (#846960) Homepage
    Way back in the 19th Century, New York had very liberal incorporation laws. When New York passed a stricter set of laws, a group of New York lawyers went to Delaware and convince the legislature to pass their own very liberal incorporation laws.

    A flood of incorporations then came to Delaware, making it nationally dominant, and thus created a network effect. Most incorporations happened in Delaware, so most legal experts in incorporation were specialized in Delaware incorporation law, so most incorporations were done in Delaware, so...

    Since then, Delaware has managed to keep itself a good location for incorporation with low taxes, liberal laws, and expert judges to supplement the network effect.

    Steven E. Ehrbar

  • Listen up folks!

    YOU too can make hundreds of millions of dollars in days by starting a company and going IPO without even shipping a product!

    All you need are some good Wall Street buzzwords like "Linux" and "code morphing" to descibe your nonexistent product! Be sure to cut in people like Linus Torvalds in on your deal so that you can leverage their names to maximum effect.

    By the time the public realizes that you'll never ship a product, you will have enough money to buy your own private island in the Pacific, far, far away from all the angry Wall Street investors and the FTC. Remember, this may take a little work to make people initially believe you (sucking up to Slashdot editors doesn't hurt), but it will be well worth the work!

  • First of all, letter getters seem to some degree arbitrary. For example, I got the VA letter, and not the Red Hat letter (I didn't deserve either, especially when I later learned the teTeX guys got _nothing_). Other people got Red Hat but not VA. It seems pretty arbitrary.

    However, there is a constant - the companies giving "the letter" have been companies based around free software. Transmeta is not. They are a company based around hiring a big name kernel developer (_the_ big name kernel developer), and making a x86 clone that's rather useless, then releasing no information about it. They are not open in any way. I will be very surprised if they send a letter at all.

  • Raising Money to pay off debt (Score:3)

    by Sheeplet ( 120355 ) <epchris@@@gmail...com> on Thursday August 17, 2000 @11:53AM (#846964) Homepage
    It seems that they're shooting for the $200 million to pay off a $119 million debt already. To quote Yahoo: "Transmeta has historically posted significant losses, and as of June 30 had an accumulated deficit of $119.4 million, according to the SEC filing." I really don't think that companies should be filing for an IPO just to get out of debt, in fact I think that I'd be more comfortable investing in a company that has historically made some money, not lost it. (I still love Transmeta though) ==>Sheeplet

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