“Remember when people fought over getting Linux company stock options? Today, it’s the Linux companies fighting to keep their stock prices above water. Caldera, in danger of being delisted by Nasdaq thanks to a stock price lurking around 50 cents a share for months, is taking the radical step today of a reverse stock split. For every four shares of Caldera International, stock owners will now receive one pumped-up share.” Read the rest of the story at NewsForge.
Caldera Fights it Out in the Stock Market with Reverse Split
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Eugenia Loli
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any split be reverse or usual slit are stupid.
It’s about time the stock exchange change their policy about that.
That did make sense when we did have the 1/8 1/16 system, but with the decimal system now in place no reverse split should be made until the stock go under 1cent.
more it become very confusing to follow stock price when that happen.
The worst it that this make it easier for the stock to go down faster.
The stock would end up on the OTC, so what, even on the pink sheet stock can do well.
Pardon my what could be considered flamebait, but I’ve found it reassuring to notice how the market is still able to eliminate with time even the most hype-drenched sectors. Of course, it should have been obvious to most from the beginning: companies centering their business models around trendy and popular concepts with no definite plan of action are going to fail. And simply embracing the magic of open source is (was?) likely among the worst business models around. Like it or not, it’s damned tough for a business to make money off of stuff that’s of no cost! With failing companies left and right (Loki’s debacle, Mandrake’s pitiful plead for charity), it would seem to me that before long Red Hat and the corporate titans (you know, Sun, IBM) will be the only remaining players in a field that was never meant to be applied to business. Free software advocates should reevaluate what the purpose of free software is: to liberate the user. IMNSHO, If you only support Linux because you want a cool desktop, a fast operating systems, and games all for free, then you’re completely missing the point.
Phew. That felt good. =)
how any company that deals exclusively with something they have to give away is going to make a profit. Of course if Caldera or mandrake (who’s distro I really like btw) could explain I’d love to hear it.
So far, the only Linux firm to get it right is Red Hat. So you “have” to give the OS away? Sell services: integration, migration, frustration, whatever, services to the companies that want to migrate away from Microsoft. The beauty, and bane, of linux is that it is remarkably easy to install (now), but it’s deep-there are lots of idiosyncracies, inconsistancies, dependancies, and the like that make it a steep learning curve for corporations, or anyone for that matter.
Red Hat had the foresight to realize that corporates would need some hand holding as they transitioned from the dominant OS.
SUse, Caladera, and Mandrake all made the same basic misstep-targeting the desktop. Like it or not, the herd just isn’t interested in migrating to something that will make them think-they just want their email, their AOl, and instant access to PORN. Anything that makes them think along the way, seems to just get dropped.
So, chalk Caldera, and Mandrake, up to the roadkill of Microsoft, the TV-instant gratification-don’t make me think-just make it all run together and take my privacy please culture, or the lack of invetors to see a non-MIcrosoft world.
RIP.
RedHat isn’t getting it right. RedHat still loses money right now — they only claimed to be cash positive on a pro forma basis (i.e. excluding interest payments).
RedHat’s only “getting it right” is that they IPO’ed early and got a lot of money (and then they did a secondary offering to get more money) — so now they are sitting on a lot of money.
“Of course, it should have been obvious to most from the beginning: companies centering their business models around trendy and popular concepts with no definite plan of action are going to fail.”
Caldera has more of a plan than any other Linux company I’ve dealt with. Caldera makes the best commercial distribution available. You can’t do that without a plan. The problem is that lesser linux distros, like RedHat, are out drumming up business with everyone under the sun while Caldera make the best product for the end user.
Because of their focus on the user exerience and quality instead of OEM deals, etc., they may never be the company that RedHat is, but I’d much rather be using Caldera at the end of the day than RedHat, SuSE, Mandrake and many other distributions.
Yo anon!
Where did you take finance 101? All the street, and hence the institutional investor, VC, etc. care about is pro forma earnings-it is a common valuation. It’s like calling out your EBITDA as positive, with a negative net income after your factor all in.
With positive EBIT, they have the ability to raise more capital (float more stock) and pay off intrest bearing debt, but choose not to. Why? Negative income isn’t bad in this case, since they get preferential tax treatment as a result of negative net income.
And, the first rule of business is what? Pay as little taxes as possible!
So don’t fault RH for making a good business decision to pay off their debt.
It’s not true that institutional investors only care about pro forma earnings. They also care about accounts under GAAP (Generally Accepted Accounting Practices), which is a more objective measure. That is, they do if they’re concerned about their money. You see, there are no regulations or even generally accepted guidelines for calculating pro forma earnings, so some companies have pushed the envelope and release pro forma earnings well into the realm of science fiction. Enron is only the most noteworthy example, but companies like Cisco have been quite guilty of it too. Pro forma earnings have their place, but can not be considered without more objective financial information. The Enron scandal just proved to us how difficult objective data is to come by when a firm is intent on obscuring its true position.
What you say about the wisdom of a young company keeping its earnings at break even and paying off debt instead of paying taxes is certainly true, though. As long as a company can make very little money and still keep its stock price high, that’s a great situation.
Juswhitaker, where did you take finance 101?
Institutional investors only cares about GAAP results (that’s why the GA in GAAP stands for “generally accepted”). Only amateur daytraders care about pro-forma results.
RedHat lost 15 million dollars in the latest reported quarter (Q3), lost 55.4 million dollars in Q2 and lost 27.6 million dollars in Q1. So from Q1 to Q3, RedHat lost 98 million dollars.
> Mandrake’s pitiful plead for charity
When did that happen? I must’ve missed that one.
Mandrake never asked for charity. All they asked for was for people to join the Mandrake Club, which is excellent value for money. I don’t see anything wrong with that.
No matter how you embellish it, what Mandrake asks for is charity.