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CNET News.com: Andover.net to try open but unproven IPO process

Sep 22, 1999, 22:25 (2 Talkback[s])
(Other stories by Stephen Shankland)

"Andover.net--which aims to be the top Web destination for fans of the upstart Linux operating system and other open-source programming projects--will use W.R. Hambrecht's OpenIPO process. In contrast with the traditional way a company goes public, OpenIPO uses an auction method that gives individuals the same power as the institutional investors who traditionally benefit most during successful IPOs.

Though the method includes more investors and could get around some of the problems that Linux seller Red Hat experienced when it went public, OpenIPO hasn't won everybody's heart. 'I'm not a fan of the OpenIPO process,' said David Menlow, president of the IPO Financial Network firm, noting that the two companies that have used it so far, Salon.com and Ravenwood Wineries, haven't been roaring successes on the stock market."

"Red Hat, the first Linux-related IPO, used a different method. That company offered the opportunity to participate in its IPO to about 5,000 developers--a process that partly backfired as not all who wanted to were able to get in on the offer."

"Larry Augustin, chief executive of computer maker VA Linux Systems, has said his company plans an IPO and is working to figure out the best way to include the open-source community."

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