Re: VA Linux's Spamming

[bf347@lafn.org (David Lawyer)]

>
>
>> >I think that sending unsolicited 1 Mb messages to hundreds or thousands 
>> >of people is extremely inappropriate.
>>
>> I agree - this is a really annoying practice - made more so by the 
>> lengths these people have gone to (searching thru the docs AND source 
>> code for addresses) in order to hawk their product around...
>> clever? NO! nasty? OUI!
>
Donnie Barnes wrote:
>I'm obviously a bit biased, but let me chime in here.
>
>First, this is not an offer to sell anything to benefit the company.
>It is an offer intended to benefit the recipient.  You can call that
>spam if you want, but the offer was made in an effort to help YOU,
>not the offerer.  The offerer (in this case VA, in the former case
>RH) gains nothing monetary by doing this.  VA will sell every single
>share they issue at the IPO offering price, period.  VA will net exactly
>the same dollar amount from this IPO whether any of you folks who got
>that 1M email buy or not.  So how is that spam?  It was done as an
>offer to *you*, period.
>

Of course it benefits the company since it will give them about $50
million cash to support their highly unprofitable operation.  They already
have a lot of stock issued (partly held by them) and the IPO will increase
the asset value per share of such stock about 3 times.  Due to dilution
the company net worth per share of IPO stock purchased will only be a
little over ten cents on the dollar.  You pay $1 and get a little more
than $1/10 worth of the company.  So the stock is really only worth a
small fraction of what they will sell it for. 

Now if the company held a monopoly like Microsoft, the value per share of
stock could be much higher that the assest value per share.  But VALinux
is only selling computers with Linux preinstalled and that's not too hard
for anyone to do.  Still, people who buy the IPO may make money based on
the old "greater fool theory".  They are a fool to buy the IPO but a
greater fool can be found to pay even more for it.  But they could also 
loose.

>Yes, a 1M mail was probably not the best choice.  Note that we did
>not do that.  But the lawyers for VA probably required it.  They probably
>had good reason to.  If I had asked our lawyers they would have probably
>made me attach the prospectus in our offering.  But I didn't ask.  :-)

I agree that most of what they sent needed to be included since reading
all of it discloses what a .... it is.  But it would have been much much
shorter if they had sent it in plain text format instead of Adobe pdf
format.  I still haven't read it all and the figures I mentioned may not
be exact since I didn't take notes. 

			David Lawyer


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