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)
Desktop-as-a-Service Designed for Any Cloud ? Nutanix Frame
"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..."