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

“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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