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NewsForge: MandrakeSoft Looks at Red Hat's Cash and Says "We Need More of That"

Jun 05, 2002, 20:30 (13 Talkback[s])
(Other stories by Tina Gasperson)

"It's not a huge surprise that Paris-based Linux distributor MandrakeSoft is selling stock to raise money. The company has displayed a fair amount of creativity in recent attempts to fill the company coffers; the Mandrake Linux Users Club and the Corporate Club are both subscription-based options that provide perks for a monthly fee. Mandrake isn't saying one way or the other whether these offerings have been successful fundraisers, but an announcement Tuesday said that 'despite a difficult economic climate' Mandrake has achieved a 'solid increase in revenues.'

"Mandrake needs to break even before the end of the year; back in May 2001 there was talk of getting out of the red in a 'few months.' In its February 2002 shareholder newsletter, it was 'confident that it will reach its break even point by the last quarter of 2001/2002," through greater income and a bigger profit margin. Now, heading into the last quarter of Mandrake's fiscal year, the push is on to fulfill the 'break even promise.' Even KBC Securities, a French financial analysis company, predicted a near profit for Mandrake by September 2002.

"So the company is raising money through a stock sale that is only available to Mandrake Club members. Current stockholders have offered to freely give their warrants to allow Mandrake Club members to purchase stock easily. Warrants are pieces of paper that give a potential shareholder the right to purchase a predetermined number of shares at a set price, similar to a stock option, except that with warrants, new shares are created, and with options, you get existing shares..."

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