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NewsForge: MandrakeSoft to Warrant Holders: Show Us the Money

Aug 22, 2002, 16:00 (4 Talkback[s])
(Other stories by Tina Gasperson)


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"MandrakeSoft is giving investors a little more time to participate in its initiative to increase capital, mostly because those who have committed to buy outstanding warrants haven't paid up yet.

"MandrakeSoft CEO Jacques Le Marois says it is hard to raise money these days. "The biggest challenge we face is the current depressed state of the financial markets." In fact, since MandrakeSoft introduced the increase of capital initiative in May, the Nasdaq has dropped from around 1700 to 1395, a decrease of about 18%. 'Even with MandrakeSoft's recent positive financial results and an attractive valuation, most people are difficult to convince. Just two years ago, we could have raised all the necessary funds in only four days with a similar operation.'

"The company is attempting to raise capital by calling in outstanding warrants. Warrants are like stock options in that they give the holder the right to purchase a certain number of shares of stock in a particular company, for a pre-determined price. When the shares are purchased and paid for, this is called a 'subscribed warrant.' Warrant holders are also authorized to transfer their rights in the warrant to another party..."

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