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The Almighty Buck

TurboLinux Files for IPO 48

websensei noted that Turbo Linux has filed for an IPO. As someone who has been through this, good luck to you guys: I hope only the best for all the companies doing the Linux thing: Turbo Linux has huge market share (although not as much in the U.S.) so they have a good shot. The press release doesn't give any interesting information (number of shares or pricing) but thats normal for this stage in the process.
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TurboLinux Files for IPO

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  • who is going to be able to buy in on the IPO?

    price?
  • by Kid Zero ( 4866 )
    An IPO in this stage of the game? Why? From what I've seen, it just opens you up to failure that much faster. Or to put it another way, how many Linux based companies are making a profit?
    -----------------------------
    1,2,3,4 Moderation has to Go!
  • by AFCArchvile ( 221494 ) on Tuesday October 31, 2000 @06:16AM (#662355)
    Now even more businessmen can stuff this one in their portfolio and naïvely proclaim that they invest in Linux. And the whole time they'll be using nothing but Windoze. Anyone else see the problem here? I do: you have to believe in your investment. You can't just buy 200 shares of TurboLinux and hope for the best.

    (side note for Hemos and CmdrTaco: "So if stock stories never make it to Slashdot, then what the hell is this one doing here?")

  • As someone who has been through this, good luck to you guys: I hope only the best for all the companies doing the Linux thing

    I know I really shouldn't be, but is anyone else scared when CmdrTaco makes a statement like this?

  • This is getting old...
  • Not too sure about the timing of this - tech markets are not exactly well regarded in the city right now, following the tech stock meltdown earlier this year.
    Mind you, Turbo Linux _do_ have a product, an established user base, and a lot of the good things investors look for.
    Don't expect a Red Hat like surge on this one.
    Disclaimer - I work in the City, but none of the above is to be taken as professional advice. Use at your own risk, always check the label.

    OT - I've got RH 6.2, and I can't seem to find a "this is the RPM's to download to upgrade to 7.0" type functionality. Individual RPM's are RH version specific, so I can't get the latest & greatest Samba. Am I being dense here (most likely) or is RH trying to take me for another 70 UKP for the 7.0 CD? I'm truly interested, not dissing RH - but I thought the upgrade treadmill was what OSS is supposed to avoid... Someone hit me with a cluestick! :)

    Strong data typing is for those with weak minds.

  • Almost certainly not you, Joe Public. More likely Jim BigCo, or Jon RichClient.

    --Remove SPAM from my address to mail me
  • Maybe someone can write a some type of web interface to purchase the shares that will only sell to those who are on a Linux operating system. A) Let those who deserve it get the first shot B) Let those who deserve it make some money off those stuffed shirts who need us to buy shares on their behalf :)
  • by b0z ( 191086 )
    Or to put it another way, how many Linux based companies are making a profit?

    Or to put it even better...how many internet/linux/software based companies that were not established before the big internet craze are making money? Amazon.com? Nope. Redhat? They might be making just enough for their milk-money. Even the big ones are taking losses, including Apple with their short-lived comeback that is coming to an end. Corel, which had the right idea if their goal was linux for the masses, has gone down the poop-chute.

    The market is not good for these companies like it was a year ago. I think after the y2k craze hit, a lot of money was spent/wasted to fix this, and now customers don't have a lot of money to spend on new and exciting stuff. A large number of people made money last year, and got wealthy. These people went out and started their own businesses and went IPO and thought they would be rich and that the money would pour in just because they are technical related. Not so anymore, it's all slowing down and the only ones that will remain are those who have the most money to begin with, as I see all the tech companies taking losses anymore.

  • I don't even know what t think anymore when it comes to internet IPOs in general. A company I worked for in the past, Usurf (stop making fun of me), started out at about $8, climbed to $12 for a brief period of time and is now lolling about around $.82. IPOs are a littl shaky wen it comes to the internet, I'm not sure I'd invest my money in anything quite that volitle.

    Hey, perhaps I DO have an opinion :X

  • *wack* you can pick up the RH7.0 cd from cheapbytes.com for like 4 bucks. or burn your own from iso, or install from ftp, http, or nfs site. but if you want to support RedHat and Open Source, it looks like you need to buy it. Just think of it this way, at least they provide you with updates and bug fixes that you don't have to buy. (win95 -> win98 comes to mind)
  • I'm truly interested, not dissing RH - but I thought the upgrade treadmill was what OSS is supposed to avoid... Someone hit me with a cluestick!

    Thwack!

    If anything OSS buys you more frequent upgrades because you don't have to wait until the bug count goes high enough for MS to release a service patch.

    If you are only talking about functionality releases (as opposed to patches) then, Thwack!, RedHat (for example) has had a new release every six months since essentially the beginning of time.

    Happy? :-)

  • by luge ( 4808 ) <slashdot@DEBIANtieguy.org minus distro> on Tuesday October 31, 2000 @06:28AM (#662365) Homepage
    Linux Weekly News has a pretty good analysis of their filing up. You can find it here. [lwn.net]
    Enjoy...
    ~luge
  • I'm curious to see if this IPO has anything like the wild ride that Redhat enjoyed a year ago. Is Wall Street over the whole "Linux Thing," or is there room for a few more billion dollar lessons?

  • by flatpack ( 212454 ) on Tuesday October 31, 2000 @06:30AM (#662367)

    You know maybe it's just me, but haven't all of the companies that made such good IPOs last year pretty much bombed out of the market? And recent IPOs haven't exactly managed to inject any sparkle into the Linux market - investors are finally beginning to realise that open source makes good software, not good money, and that they're going to be lucky to ever see a dividend on their shares.

    And a company that has wasted this long to get to the IPO stage is obviously lacking something in their corporate makeup - every other company managed it last year, why didn't they?

    Frankly, the dream is over, and people like Eric Raymond are pretty much just as poor as they ever were. The best they can hope for is a low key event which puts then slightly above their asking price, rather than at some rediculously inflated value that will inevitably lead to the market getting scared off and dumping it like a cheap whore you've hit too hard.

  • You can possibly hit CheapBytes and get a 7.0 CD cheap, though I dunno if they deliver to Britain. I remember having to drop $10 for shipping because I live in Canada...blah.

    The problem is, 7.0 RPMs are built against a new glibc, using a development gcc. Mandrake's also moving to the new glibc. Most new packages from developers and vendors are still being built under 6.x, so you can probably get the latest software without having to upgrade your distro.
    -------------
  • I dont know how much market share TL has (but at least not much here in Europe, too), but it seems as if every company offering a Linux distribution wants to profit from the Stock hypes on (nearly all) IT Companies. I really dont think that most of these companies (except the really big distros) have made enough "intellectual input" to their product that would be worth investing in...
  • "Due to an underwriting or other relationship between our firm and the issuer, no information about this issuer or filing can be displayed until a pricing range has been established."

    But you can check back for updated info: www.ipo.com: TurboLinux, Inc. [ipo.com]

  • "people like Eric Raymond are pretty much just as poor as they ever were."

    Eric had options on 150K shares. The LWN.net stocks page [lwn.net] shows VA at $26.31, currently, meaning those options, if he still has them, are worth just under $4million, minus the (low) exercise price. That assumes he didn't sell any at a higher price, which he could have done.

    He's not quite so filthy rich as he appeared last December, but I expect most of us would think that things could be an awful lot worse.

  • by senfman ( 207535 ) on Tuesday October 31, 2000 @06:47AM (#662372)
    I think, that this "step" was the right decission, because Turbo Linux is AFAIK the largest Linux Distributor in Asia.
    Maybe some of you guys are saying: "So what?". Let me explain this. Asia will be one of the most important markets in Future, things didn't go well there in the last few Years, but IMHO it can't get worse in Asia. So Turbo Linux will grow, together with Aias economy. Maybe it will be as Important as SuSE in Germany.
    Turbo Linux has quite a solid ground to start from even if it's quite a small company today.
  • by Anonymous Coward
    To me, its a brilliant idea to try to sell a "Free Product" for money -- doubly so if its over the Internet. That is why I have invested most of my capital in an Internet Based Ice Delivery Service focused on Eskimo's in Alaska.
  • by blogan ( 84463 ) on Tuesday October 31, 2000 @06:48AM (#662374)
    Turbo Linux likes to distribute a CD with Linksys network cards. So when I was working the Resnet fair at my college, the bookstore sold Linksys, so we got a few Turbo Linux CD's that people didn't want.

    However, this one girl comes down and says, "I can't get my card to work." She had tried setting it up herself. We thought it would be something like enabling DHCP or something simple. She brings her computer down and boots up. LILO appears on the screen. We laughed so hard. I think she got confused during the install when it started asking about partition tables.

    Best of luck in their IPO!
  • by luge ( 4808 )
    The LWN S-1 analysis notes that they do plan on a small offering to developers and such, like RH and VA did. But no mention as to how many people that would apply to, or how they would be selected.
    ~luge
  • Actually, there are two things that seperate OSS from the propriatary crowd with regards to the upgrade cycle.

    The first of these is that the upgrade cycle happens *faster*. At times and for some projects on a daily basis. You have access to the most cutting edge code at all times, rather than waiting for the commercial outfit to release an upgrade.

    Many people never *upgrade* in the sense that is used in the commercial propriatary field because they KEEP their code up to date on an ongoing basis.

    So, boot to the head, you *don't upgrade OSS the same way that you upgrade propriatary software if you want to keep up to date.*

    It's perfectly possible to buy one single install disk and NEVER buy a newer 'version' of the release disk. It is quicker, easier and safer for some, particularly the home user to upgrade from a known stable release disk, but not the best way to stay up to date.

    Now, on to the second difference. *YOU* are in control of your upgrade cycle. The fact of the matter is that if your system works the way you want it to you don't EVER have to upgrade at all. The same would be true of propriatary systems, plenty of shops out there are still running Windows 3.11 and MOST NT shops are still running NT 4, but the propriatary companies do everything they can to break compatabilities between versions to force the upgrade.

    Under Linux if you decide you need an app that requires a new updated library you * don't have to upgrade the operating system, * meerly download and install the new library, which is version aware, and dosn't break your OLD libraries.

    "Hobbiest" code writers will do anything to PREVENT a new version of anything from breaking their old code. After all, THEY are the ones that will have to rewrite and support it. If they MUST break old code they will do everything they possibly can to make the fix as quick and painless as possible.

    This modularity of upgrading goes right down to kernal level. You can build yourself a kernal of ANY version, and include ANY upgrades in it that you want leaving OUT anything you don't want.

    To sum up, boot to the head, in OSS you don't escape the upgrade cycle, you escape the FORCED upgrade cycle that requires you to replace your entire operating system because a propriatary vendor *deliberately* breaks your old system with its new in order to make you replace what was a perfectly good system in perfect operating condition. YOU become the supreme commander of your upgrade path which could range anywhere from never to DAILY. Commercial distros of Linux are not versions in the sense that Windows comes in versions, they are meerly convienent BUNDLES of upgrades. You have to change the very way you think about upgrading when dealing with OSS.
  • I'm still waiting for the slashdot IPO

    but thanks anyway!

    ;-)
  • TurboLinux founders Cliff and Iris Miller have begun a new company, Mountain View Data [mountainviewdata.com], along with Peter Braam known for the Coda and InterMezzo file systems. Braam was associated (and perhaps still is) with TurboLabs [turbolabs.com] in Santa Fe, New Mexico.

  • by Alan ( 347 ) <arcterexNO@SPAMufies.org> on Tuesday October 31, 2000 @07:36AM (#662379) Homepage
    This is my only real impression of turbo linux. It has nothing to do with their distro, software, or anything else. It has to do with their methods of sales.

    I work for a company that was fortunate enough to be at the Comdex in Toronto earlier this year, in the Linux Business Pavillion. We were showcasing our new product and were situated right beside TurboLinux. They had hired a guy who called himself a "Perceptionist". IMHO a glorified magician. Anyway, I'm not denying this guy was good. He had a great act and had a lot of cool things he did.

    However, he didn't mention Turbo Linux a lot. Once and a while he would go into a speil where he'd throw out words that had close meaning, and that related to TL, and occasionally he'd mention them by name. His main purpose (and only purpose if you ask me) was to draw people to the booth. With promises of "sign up here and recieve $25 worth of software" (I never recieved anything BTW) and the like. There was also the issue of clogging the isleways. And I do mean clogging. We had people turning the chairs around in our booth so they could sit or stand on them to see him. That and you literally had to fight your way through this crowd to get through.

    Anyway, like I said, he had a good show. He also had a LOUD show. His speaker system was set very high. The first day of the show TL, Caldara, and Penguin Linux had an unofficial "you turned your volume up so I'll turn mine up" battle. Our company, situated beside him and withouth the budget that TL had didn't have a chance.

    For all three days we re-scheduled our twice daily demos where the president made a presentation from 12:00 to 12:30 to accomidate TL's speaker. We were quite polite I think. We also asked them on more than one occasion if it would be possible to turn the volume down, as even with our entire booth between us and them we still had to yell to talk to anyone who wanted to talk to us.

    Our complaints, polite at first, were met with "oh I'm so sorry I'll correct that right away" and "our volume is in the control of comdex, we set it to whatever they want us to", followed by, well, no action.

    At one point we had a HUGE amount of people around our booth, clogging the isles in fact, listening to a demo that was being given. At this point the perceptionist seemed to think "hey, there's people around but they're interested in that booth, I'll draw them away" and started up his act, effectivly moving a lot of the people away fro us to them. Sadly, there's not a lot of chance of "new firewall product" information beating out "I'll give you $4000USD if you can cut higher than me". After this we went and talked to the main person from TL *again* and was again met with "gee I'm really sorry about that".

    Plain fscking rude is what it was if you ask me.

    Now I don't begrudge them for trying to get people to their booth. The more people at their booth the more potential people at our booth, or in fact around the Linux Bus. Pav. in general, which is good. However, there is a clear differnece IMHO between good business practices and bad business practices. In this case, this particular programmer has turned from indifferent about TL to not liking them at all. So sorry TL, better luck next time.

    Oh, and a postscript to that.... the same perceptionist didn't seem to hold up to his wonderful promises of "I'm here because I'm a stockholder and I love this company" as he was p1mping himself for Compaq at the SJ LWE this August :)

    That's my TurboLinux story
  • > you have to believe in your investment

    Oh. Certainly not. There is something called 'diversification' that is used to cover risk. That means that an *investor* (by opposition to a *speculator*) will buy stocks with different risks factors.

    Cheers,

    --fred
  • For those who don't know: Slashdot was bought by Andover (ANDN) which was then bought by VA Linux (LNUX). Don't go looking for ANDN, it's now LNUX. Unless LNUX decides to spin off the websites and concentrate on rack servers, there will never be a /. IPO.

  • TurboLinux has raised nearly $100 million through private funding and is looking to raise a modest $60 million from the IPO.

    Although the market may not be kind to Linux right now, remember that the IPO process is lengthy and they will probably not officially become public until February at the earliest. Maybe the market will change by then.

    Also of interest are the current owners of TurboLinux. Although executives and directors hold a majority stake (52%), Dell has 9% and Intel has almost 7%. The remainder are various VC firms. Good luck Turbo.

  • Many people who participate in IPOs have been wondering if it's a good time to do so. You can read articles on CBS Marketwatch or Red Herring or numerous other sites, and you'll notice IPOs slipping further out in the stream.

    Turbo Linux may, or may not, be a good IPO. Another good IPO coming up is the Transmeta (TMTA) IPO, which is listing at $13 to $14, is noted as Red Hot by Red Herring's IPO street poll [ipo.com]. This, of course, is the company that Linus Torvalds works for, and it will IPO in six days on November 6.

    For those whondering how to qualify for IPOs - basically, you need an account at a broker who carries them and sufficient funds. This can be pot-luck such as E-Trade, who is not a lead broker (you'll probably need more than $50,000 in market assets), or one of the major IPO brokers such as Morgan Stanley Dean Witter [msdwonline.com]. But MSDW requires you to have more than $250,000 to participate in IPOs.

  • If they sell IPO stock at $8 - and they sold (let's say) 10 million shares... they get $80 million (more or less) capital.

    Now - it goes up to $12. Some of their employees make a little coin from their options/shares... good for them...

    Now - it drops to $2... Hmmm... anyone holding the stock get's a little burned... but the company still has their 80 Million (or what's left of it)... and they start giving out options based on the new $2 price...

    Stocks are supposed to be viewed long term - not as get rich quick schemes that everyone seems to want them to be. If you think a company will do well in the long term - and their stock just took a pounding, buy some and hold on to it.
  • > That assumes he didn't sell any at a higher price, which he could have done.

    In case of options, I would be very surprised that he could exercise that soon.

    Btw, it looks like he have common stock, at the 6th december and an extra bonus of 12,952 the 31th december (of more than 2.5 M$ !)

    Today, he still have $5,489,000. If everyone had the same kind of deal, it looks like he could sell since the 7th june (ie: after 6 month).

    Sources:
    http://biz.yahoo.com/t/l/lnux.html
    http://biz.yahoo.com/t/66/6386.html

    Cheers,

    --fred
  • Well, yes and no. If your definition of a successful IPO is one where the stock price skyrockets on the first day, making fortunes for the original investors as well as for users who submitted bug reports, random people from Freshmeat and everyone else but Bowie J. Poag -- that's not going to happen.

    But if the goal of the IPO is to raise a few million dollars to keep the company going, that's still manageable if they have good fundamentals. And until the Netscape IPO, that's what stock issues were for.

  • Well, that's the problem. Long term, Open Source stocks are doing really, really bad. I mean really bad. This is not a good thing. The market does not like Open Source (can we say 'business model'?), and will not for the forseeable future. Anyone with any financial sense at all will stay away from this IPO like the plague. I know I will.

  • rpm 3.0.59-3, or 3.0.6 will do. to begin with for upgrading.
  • Probably depends on definition of 'long term'. Most/many open source companies haven't really been public for long enough to allow evaluating long term performance.

    As to profitability of Open Source, I thought S.u.S.E has been profitable? (of course one company Open-Source-all-Profitable makes not, but as an example?)

  • Hmmm so. I fear for them. Does this now mean that Turbo Linux will be slashdotted into becoming another Microsoft Analogy? Heaven forbid they should show some sort fo success.
  • Can any body provide me with a list of ANY significant Open Source projects hich TurboLinux has initiated or taken a large part in. Because I really can't think of anything, and Turbocluster server has been promised to be Open Sourced for about one and a half years anow, and I'm getting real tired of the wait.

    Turbo's commenst about how `Linux was *once* developed by hackers, this isn't a very good thing, and we're going to change it' also has me worried.
  • How does Billco Linux sound ? Of course it would just be Redhat 7.0 with Corel's installer and a root-access samba share for remote administration with a windows box, but I could surely go for an IPO within months... right ?

    (this satire does not necessarily reflect the opinions of Billco and/or his other conscience)

  • The vast majority of the 7.0 _source_ rpms will happily compile on a 6.2 system....
  • huh? I'm pretty sure Bill G didn't give a damn about linux when he bought shares of Red Hat. So I should sell my shares of MS because Windows is a piece of crap? No thanks. It happens to be a piece of crap that is making me money (sometimes) much like Red Hat did at one point.
  • The source code is now available under a commercially restrictive license. Check out the beta.turbolinux.com site.
  • I must admit I am getting sick and tired of those companies who obviously think they earn mo' money by selling stock options instead of (real) products. Quite a number of them has miserably crashed in the near past - I mean, how do you justify a company value of 50 Million bucks when this your company employs a measly 15 employees? Will they ever be able to rake in that money? Nah!

    (now this ain't aimed specifically at TL, don't get me wrong) For the sake of the business, they'd better concentrate on supplying top-notch services and products for the near future, building some reserves for the meager years. I know a lot of good companies who are still self-owned and can act with a focus on their interests instead of their shareholders'. Going public is always a little 'selling your company to the sharks'.

    Just my CHF 0.02...

  • Now even more businessmen can stuff this one in their portfolio and naïvely proclaim that they invest in Linux. And the whole time they'll be using nothing but Windoze. Anyone else see the problem here?

    I don't agree with that.

    I own a decent amount of stock in an IT Professional Services company, but I'd be darned if I'd ever pay another company to do services for my company. I'm a do-it-yourself kind of guy.
  • The risk factors also talk about the possibility of losing key personnel, and state: "In that regard, in July 2000 Irving Miller, our Chairman, co-founder and former Chief Executive Officer, and Iris Miller, President of our Asia Pacific division and co-founder, were terminated without cause." To do so, the company paid the Millers $850,000 in separation fees, and also bought back $7.5 million in stock (at $3.65 per share). And they may not be done paying the Millers yet

    Okay ... they are trying to raise $60 million dollars which they state they don't expect will last them more than a year with current operating costs ... but on top of that there are questions as to pay-out to the original owners who, according to other information still own 30% of the company ...

    Now call me silly, but I have this strange feeling that a good proportion of this venture capital is going to be spent in further buying the Millers out of the picture rather than for worthwhile business development ...

    Just a thought that struck me

    Rob
  • If that happens, then the Linux users who do but into the IPO won't be able to benefit from the Windoze using suits who are trying to get in on the action driving up the price.

    LK
  • 1. I work fn the securities department of a major bank and I can authoritavely say that 'long term' is > 5 years in investment terms. The problem is that the tech market has been ruled by *speculators* not *investors* 'til now. 2. There is a reason that OS is succesful in systems software: it is the software that requires Service and Support, which is where OS compans hope to make money. This is also why IBM is an OS supporter, they are primarily a hardware/service company. The equation goes: commodity hardware + free Op. Sys. = demand for service. It may be a vaid biz model, but time will tell

Algebraic symbols are used when you do not know what you are talking about. -- Philippe Schnoebelen

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