"At press time, one of the executives who says he
walked out of Penguin Computing because of the brouhaha going on
over there e-mailed us what purports to be the inside story. You
will see why he might want to keep his name out of it.
He said the layoffs were precipitated by the fact that the
company's 27-year-old founder Sam Ockman didn't want to dilute his
52% ownership to less than majority control. (Say, something maybe
in the neighborhood of 40%.) He said Ockman said as much. He said
Ockman said he would rather have control of something small than
not have control of something large.
The ex-exec explained that former Penguin CEO Marty Seyer and
the management team had lined up $15 million in C Series funding,
and that there was at least one serious unidentified buyout offer
on the table. Sam balked over the terms and fired Marty the night
before the Penguin board met last week. Sam reportedly said he
could do better as a white box vendor."