Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

E-Trade backs down, lets Red Hat IPO folks in

CmdrTaco posted more than 15 years ago | from the resolution-is-good dept.

Red Hat Software 127

Bowie J. Poag writes "First it was "The eligibility profile will have no bearing on your ability to participate." Then, it was "Sorry! you failed the eligibility profile since you dont have half a million in the bank and 20 years trading experience. Bye." Now we've come full circle, thanks to a great deal of flames from the community.. E-Trade is backing down and letting us in. "

Sorry! There are no comments related to the filter you selected.

Re:Right On! (0)

Anonymous Coward | more than 15 years ago | (#1777497)

Cluelessness? Hmm...follow the directions, fill out the forms, and then get told that you're not elligible? Ya know, other than being clueless about the stupidity of a system where you get offered stock and are then turned down when you try to take advantage of that offer, I don't see how everyone here is so moronic.

Oh, and look at that. It seems that all the bitching and whining has had an effect.... E*Trade backed down! So, what does that say about the situation? E*Trade was going by some stupid rules invented by the suits, and when geeks arrived and questioned the rules, suddenly E*Trade rescinds them? Now who looks like the fool? The suits and their stupid, arbitrary rules, perhaps?

Re:I'm not sure if this is a great victory or not (2)

Sontas (6747) | more than 15 years ago | (#1777498)

There is a very big difference here between the Red Hat IPO and the various other "internet" stocks out there. Red Hat has some actual assets. They actually sell something. They are more than just some portal web site or something that deals entirely in the abstraction that is the web and banner ads.

And, they are the best positioned company, at least in the popular press's eyes, to give Microsoft a run for it's money. I wouldn't be surprised if Microsoft somehow managed to make sure that Red Hat did well, simply to foster the notion that there is OS market competition on the Intel/x86 platform.

Re:Dishonesty (0)

Anonymous Coward | more than 15 years ago | (#1777499)

Good argument, but completely false in practice.

First of all, by opening an E*TRADE account, you specifically sign away all liability, and agree not to sue them.

Secondly, as we all know, nothing will stop people from suing other people for any reason anyway.

Try it again (1)

John Whorfin (19968) | more than 15 years ago | (#1777500)

Whoa guy, calm down. I didn't get the "Ooops letter either (and yes I got "The Letter" and subsequently got bounced from ETrade). However, this morning I attempted again to get in on Red Hat's IPO and to my surprise was successful.

In regards to your RPMs. Why punish RedHat? The brought you the RPM format in the first place (Um, the "R" in RPM). If you want punish them, why not switch to a non-RPM based distro like Debian?

Either way, since I'm gonna be a Red Hat shareholder, I'll be taking your source and building Red Hat friendly RPMs wih it.


Re:whatever (1)

thal (33211) | more than 15 years ago | (#1777501)

i don't know if this would've been legally possible, but it would've been best if Red Hat treated this like the OSS developers were employees of Red Hat and let them in privately or something. Without the more important developers, Red Hat wouldn't be where it is today and some of these people can be almost thought of as unpaid employees. I mean, isn't Joe Schmoe Linux user who works at Red Hat as a phone tech support guy getting a chance into the IPO or stock options or something, without an ETrade form to fill out?

Most of Red Hat Linux is a product that was developed by these people who are not employees of Red Hat. Because they, in some very important ways, helped the company, they shouldn't be treated just like the guy off the street.

Re:Good! (1)

strombrg (62192) | more than 15 years ago | (#1777502)

I've gotta agree, nothing appears to have changed.

I just got off the phone with E*Trade. They took
my application over the phone, I answered the
questions honestly, and they told me I
wasn't considered suitable for the IPO.

Surely this isn't what Redhat had in mind? Didn't they -want- the small investor to have a chance
to get in on this?

Whoa, what's this about selling out? (1)

WillAffleck (42386) | more than 15 years ago | (#1777503)

Hey, guys, stop staring at the shining dollar.

Aren't we supposed to "make sure that Red Hat remains true to Open Source goals"?

Or did we all lose religion when the first chance of making a buck became obvious.

Sure, sell a little to cover the purchase cost, but keep the rest to make Red Hat honest.


Re:Getting an E*Trade Account? (1)

thrash_ (34661) | more than 15 years ago | (#1777504)

One other thing. If you go to the Account Services tab on their site, you will see your account there after you log in. If it has a positive balance, your account is active. They got the paperwork on Friday, and Monday my account was active.

FWIW (1)

John Whorfin (19968) | more than 15 years ago | (#1777505)

Hey, I got the original Letter from Red Hat and subsequently got bounced by ETrade.

I complained to ETrade (at their IPO complaint address - it bounced), Redhat (replied to the Letter) and Rob Malda (um, who's that? :)).

I recieved no email from Etrade at all.

This morning I tried again and - surprise - successfully submitted a bid for 200 IPO shares of RHAT.

What's this ETrade letter folks are talking about?


bkosse (1219) | more than 15 years ago | (#1777506)


Freggin SEC. The problem is my mom can get punished if I lie. :(

Re:Not the answer I want to see. (2)

dillon_rinker (17944) | more than 15 years ago | (#1777507)

I can go to Las Vegas and put every cent I have on one spin of the roulette wheel. I can give all that I own to a televangelist (praying for that hundred-fold increase). I can buy tickets in a lottery run by my state. But I'm not can't invest in the stock market because I'm not QUALIFIED? What a load of CARP!

Re:More ETrade lies. (0)

Anonymous Coward | more than 15 years ago | (#1777508)

> Although I still believe that the problem here is Etrade and not Red Hat, there is absolutely
> nothing I can do to make my displeasure known to Etrade,

Maybe you could tell other people not to use Etrade, like you are doing now? Perhaps you could put a message like that in your packages that gets displayed when they are installed?

> Therefore, what I will be doing is withdrawing my prebuilt RPMs, and distributing the software I
> maintain in source code form only

Well, you could try and devalue the worth of Red Hat by doing something like this.. if enough people did so it would have an effect.

> I will rerelease my RPMs once they've been modified not to install on RH, but only on other
> RPM-based distributions, such as Mandrake.

man, are you bitter or something? This is stupid. No distribution would accept such a package, and the first thing anyone would do is just re-do the RPM without such a restriction.

Retake Questionare? (0)

mholve (1101) | more than 15 years ago | (#1777509)

More like... LIE.

"Yeah, I'm worth millions. Yeah. That's it. That's the ticket."

What they want (1)

WillAffleck (42386) | more than 15 years ago | (#1777510)

They want you to:

(bare minimum)
1. Have at least $50K in liquid assets (cash, money market).
2. Have made at least 75 trades over the past year.
3. Be an Agressive Investor.
4. Hold for the long term. Which means not sell the day of the IPO.


1. Have at least $500K.
2. they don't care about the rest that much


You can retake the test, Mr. Honesty. Just do it again.

Re:Slashdot Effect. (1)

daytrip (25725) | more than 15 years ago | (#1777511)

"I suggest we make a new name "The Wired Effect" for overloading websites linked to by /. "

Yes, the Wired Effect is:

Worthless Information Repackaged Every Day


Thanks wired, for telling us the samething slashdot does, but with little added insight! too (1)

WillAffleck (42386) | more than 15 years ago | (#1777512)

IPO of $28, high of first day about $105, down to $30s right now. I'm just waiting for $30 to buy it.

Re:Watch WHO (2)

MISplice (19058) | more than 15 years ago | (#1777513)

One way is to look at the block trades for the day, how many there are and depending on where you get your information they may even have whether they are buys or sells... the more block trades on the buy side the better chance it may be an institution..i.e. business account.. that will hold on to it for a while and not day trade it.

I'm lucky, I work for a major brokerage house and have research , real time qoutes on all listed stocks and other brokers to talk to and gather information from. Its a little harder on line but if you watch the major investment sites like Motley fool and Raging Bull or you can probably find that information there for the most part.

Or you can hire a broker to do it for you, most places don't charge a fee unless you trade. So a good way of going about it is to try and start a relationship with a broker.. whether professionally or find a broker with similar personal interests.. Believe me the nerd/geek brokers exist that hack on computers on their off time.. and then just start milking him for info. If you like him enough open an account if not use the valuable info and trade on-line. Be careful though milk them to much without establishing an account and they will dry up after awhile.

Question (0)

Anonymous Coward | more than 15 years ago | (#1777520)

Maybe Im slow, or maybe its just because i didn't get the infamous "Letter" but as far as I can tell you can't even begin the IPO process yet...the expression of interest phase hasn't begun yet according to E*Trade's IPO Center page.

Any clarification?

Re:why etrade...? (2)

mattdm (1931) | more than 15 years ago | (#1777521)

Because the IPO is going through etrade. You can't get it elsewhere until afterwards.


Re:We're a "Machine" (1)

thal (33211) | more than 15 years ago | (#1777522)

> you misspelled 'organized'. hope this helps.

actually, "organised" is how that word is spelled in england and, given the posters email address domain ".au", in australia too.

Re:Question (1)

watanabe (27967) | more than 15 years ago | (#1777523)

Certain people in the Open Source community
were forwarded a pre offer in a letter from
RedHat, apparently.

The rest of the IPO investors are unable to
indicate interest yet; E*trade seems to be
saying mid-to late August.

Sadly, I'm not one of those who got the letter,
so I don't have the special URL. Anyone want
to mail it to me? peterv[at]

Re:Getting an E*Trade Account? (1)

boutell (5367) | more than 15 years ago | (#1777524)

Yes, I was confused too. So I picked up that
thing with the MOUTHPIECE and the EARPIECE
and the BUTTONS, and I CALLED the special
Red hat support line at E*Trade, and y'know
what? My account is completely ready. Elapsed
time less than four business days.

I'll be highly amused if a bunch of people
miss out on this purely because they are
allergic to old technology. It wouldn't be
the first time. Certain acquaintances of
mine whined forever about the difficulty
of opening an E*Trade account. Not
coincidentally, they don't use phones either.

Re:Question (1)

bluGill (862) | more than 15 years ago | (#1777525)

Perhaps I'm wrong, but my understand is some people have the opertunity to buy redhat shares before anyone else. You can go to your regular broker on the day of the IPO, and buy all the shares you want, up to the limit of your money, or issued shares. Those who got the letter can go to ETrade before the IPO date, and buy some shares. Not all they want, but redhat has reserved some shares for them. The advantage is they get these shares at the IPO price, not at whatever price redhat trades at on the first day!

Normally a deal like that is given on to the big investors, generally for favors. Often it is "In return for buying shares before the IPO, you will cover us in the press one month after the IPO." I mentioned one month latter because many of those involed with IPOs legally need to keep their months shut about it until one month latter, which may affect some redhat investors. Redhat is giving this deal to little guys in recignition that the little guy made them big.

Re:Grow Up (1)

thal (33211) | more than 15 years ago | (#1777526)

> you misspelled 'lose'. hope this helps.

god, what are you, an ispell bot? at least you're right this time. people who spell "lose" as "loose" really annoy me.

Not the answer I want to see. (2)

mattdm (1931) | more than 15 years ago | (#1777527)

This is nice and all, but I'd rather instead of saying "lie, and you might make it", they'd say "having the RH letter automatically qualifies you".


Re:What the "letter" meant. (1)

thrash_ (34661) | more than 15 years ago | (#1777528)

Actually, no. E-Trade specifically says that the only people that can indicate interest are those who got the letter. If you did not, you stand a chance of forfeiting a future interest in other IPOs.

Re:We're a "Machine" (0)

Anonymous Coward | more than 15 years ago | (#1777529)

We're a neural net. You can't possibly understand the thought processes of a machine in which you are merely one cell.


2nd time is a charm (1)

Anonymous Coward | more than 15 years ago | (#1777530)

Well. I did it. I called them up and told E*TRADE I had 'forgotten' some information, and would like to update my profile.

They helpfully reset it for me. A little later I did it again on the web, and *bing* got in.

Lied like crazy however. Doubled my yearly income, liquid assets, etc..

I feel kind've icky. Ah well. It'll pass.

Re:Well good.... (1)

cyberdonny (46462) | more than 15 years ago | (#1777531)

But if people aren't allowed to flip, wouldn't trading volume be lower (actually zero, if everybody respected the rule). And low volume stocks are known to be more volatile. So, can anybody explain me the mechanism of this restriction?

Re:What the "letter" meant. (1)

cyberdonny (46462) | more than 15 years ago | (#1777532)

No, other people can participate as well 1 week later, but they have a far lower probability of getting any shares.

Volatility (1)

Rabbins (70965) | more than 15 years ago | (#1777533)

More importantly, stocks with few shares outstanding are volatile.

On the day of an IPO, you see the volume of shares traded to be in the millions. For instance when came out, there were over 17 million shares traded. Well, only issued 12 million shares!!!
So many of these shares actually passed through dozens of buyers. This causes a stock to become incredibly volatile, when there is a lot of action with so few shares outstanding.

Intel, on the other hand, regularly sees 20 million shares traded in a day. While far from a predictable stock, you do not see such huge jumps because there are over 1.6 billions shares outstanding.

Low volume stocks are only more volatile when there are very few shares outstanding.

hope that helps...

Re:Whoa, what's this about selling out? (1)

Rabbins (70965) | more than 15 years ago | (#1777534)

You can always buy the shares back later, when it settles down a bit, and then hold onto it forever.

Then you can own something you believe in, AND hopefully make a buck too :)

For those getting initial shares on E-Trade, I would strongly recommend selling them shortly after the IPO. Who cares if you black-listed by E-Trade... how many more times are you going to really get a chance at getting in on a great IPO!?

Re:More ETrade lies. (1)

el_nino (4271) | more than 15 years ago | (#1777535)

As far as I've understood this whole matter, you should be blaming the SEC, not Red Hat. Writing to your local congressman or something would be a more sensible approach.
/El Niño

Let go of E*Trade (1)

cmastro (62452) | more than 15 years ago | (#1777537)

E*Trade has grown way beyond its ability to properly care for its customers. I will use E*Trade to the end of the year (because of my investment plan with them), and then move all of my accounts to a competitor. That competitor has even answered my email in two days, somenthing you will *never* get from E*Trade.
My suggestion: get your IPO stocks on E*Trade and then transfer your account to another online broker; it's worth the cost.

Re:2nd time is a charm (0)

Anonymous Coward | more than 15 years ago | (#1777540)

That's not an Icky feeling, its the feeling of being a good american capitolist--of course senator, the funds we are giving you should in no way influence the way you legislate cigarettes, even though we are SM Winolds.....cough cough hack hack....


Who cares about you? (1)

Nassah the Protoss (34879) | more than 15 years ago | (#1777541)

You seemed incoherent in your message. Talking about Etrade, saying RedHat is innocent, blahblah, then suddenly switch to: I ain't be doing any RedHat rpms, will do them for Mandrake!

I think you should stop taking drugs or something.

Anyway, who cares about what you do?
I don't.

However, it was a funny message, in a very stupid way!

Good news (1)

J. Pierpont (58099) | more than 15 years ago | (#1777549)

It seems that the geeks have defeated the SEC.

"Didn't you know you were supposed to lie?" (3)

ravenskana (30506) | more than 15 years ago | (#1777550)

"In no uncertain terms, he proceeded to tell me that ETrade did not do background checks, would not attempt to discover if I lied, and implied that if I thought about it, and was willing to lie, I could fill out the form in such a way that it would accept me," Sparger said.

Wink, wink. Nudge, nudge. This is the way it works, apparently. *Everyone* lies. :)

Well good.... (1)

Rabbins (70965) | more than 15 years ago | (#1777551)

It is unfortunate that you will not be able to flip them however.

Just about every single IPO I have watched and dealt with over the past two years has surged the first day, and then proceeded to drop consistently over the next few days and weeks.

Ideally, you could get it at the offering, sell, and then buy again after the initial surge.

It is interesting that IPO's have only had a 5% average annual return (from the secondary market) over the past ten years. Unfortunately, these are not the best things to be holding onto... now matter how novel the business is.

Wink Wink Nudge Nudge (1)

EngrBohn (5364) | more than 15 years ago | (#1777552)

"We don't do background checks, and we have no way of knowing if you answer the questionaire truthfully."
Truly fascinating that they would state this so openly.
Christopher A. Bohn

Re:I'm not sure if this is a great victory or not (2)

Suydam (881) | more than 15 years ago | (#1777553)

It's about time. I find it almost hilariously absurd that Yahoo! has a bigger market capitalization (i.e. they're worth more money) than British Airways.

Give me a break!

Re:Good news (1)

arthurs_sidekick (41708) | more than 15 years ago | (#1777554)

It seems that the geeks have defeated the SEC.

You would think so, but according to the story no regulations or suggestions (or whatever we call SEC 'directives' that online brokerages like E-Trade tend to follow) have been rescinded or altered.

It's pretty obvious that *somebody* at E-Trade (and the report doesn't tell us how high this thing goes) just told the folks on RedHat's geek list to lie through their keycaps. This may be something like a capitulation, but methinks it's just letting geeks in on a little financier's secret.

I'm not sure if this is a great victory or not (3)

jd (1658) | more than 15 years ago | (#1777555) and BEOS, Inc, have both been crashing through the floor, lately. BeOS even briefly fell past it's IPO price, the other day.

Nor are these the only tech stocks plunging. According to several articles I've read, tech stocks are collapsing in value, especially Internet stuff.

In an environment of doom, gloom, and rush selling, I don't know whether buying into Red Hat right now would be a wise move. Sure, if things pick up, just before the IPO, those putting their money in will earn a small fortune. Red Hat is one of the few companies making money, and has a good public image.

On the other hand, I can't help but suspect that bargain-hunters will be able to pick the shares up for less, the following week or so. When the shareholders panic, they've all the wits and wisdom of lemmings. Only without the cuteness quotient.

Ok, now, don't whine if you lose $$ (3)

Booker (6173) | more than 15 years ago | (#1777556)

Now - if you were screened out the first time due to financial background or trading experience, I don't want to hear a single complaint about how you lost your money on this investment. Kapisch?! :) (Of course, I hope no one loses... but I really don't know how this thing will go!)

Dishonesty (1)

lenthe (14112) | more than 15 years ago | (#1777557)

Could someone tell me why they even bother to do the questionaire if they encourage people to lie on them. Doesn't anyone value honesty anymore?

Getting an E*Trade Account? (1)

Chuck Milam (1998) | more than 15 years ago | (#1777558)

Was I the only one confused about just how to open an E*Trade account in time to get into this thing?

I filled out the forms, etc. on the E*Trade site. Then I'm supposed to send in my check for at least $1000. Ok. So, far so good. Then, I'm supposed to get information back in the mail that confirms that my account is actually open, with some kind of confirmation number or something?

The question I have is: When is the account technically open? And how am I supposed to open an account and express interest in an IPO (with all these potential USPS delays) with only a week to get it done?

Sorry if this is a double post. My mouse got away from me, it's a bit feisty this morning...

Slashdot Effect. (2)

snafu (18104) | more than 15 years ago | (#1777559)

"It didn't take long for the open source community's propaganda machine to swing into action, known as the "Slashdot Effect" after the community's favored news site."

Well, it's good to the hackers are the only ones who suffer from News Media Term Re-Definition Syndrome.

I suggest we make a new name "The Wired Effect" for overloading websites linked to by /.


We're a "Machine" (1)

AdamT (7312) | more than 15 years ago | (#1777560)

"It didn't take long for the open source community's propaganda machine to swing
into action, known as the "Slashdot Effect" after the community's favored news site"

LOL - they make us sound so... so organised. Maybe that'll prove the open source community doens't need a board of directors and a CEO to get things done. :) I for one am terribly amused...

Re:Well good.... (1)

Suydam (881) | more than 15 years ago | (#1777561)

Ideally, you could get it at the offering, sell, and then buy again after the initial surge.
Isn't this the type of behaviour that's likely to get you barred from participating in future IPOs though? I don't really know, but I thought I heard something about that once from my broker (yes...that's right....i'm a /.geek who doesn't use an e-brokerage)

Re:Getting an E*Trade Account? (3)

Booker (6173) | more than 15 years ago | (#1777562)

1) Call them and ask them these questions. If you got the Red Hat letter, call the number listed there. They were very helpful to me.

2) You should have had more than a week... the Red Hat letter was dated 7/20, and you have until August 4 to have a funded account and make your indication of interest. Do this from the URL that was mentioned in the letter. If you didn't get the letter, don't cheat, because E*Trade will block you from ever participating in any IPO with them again.

3) You can probably fax in your application and wire the necessary funds to speed things up and avoid the USPS.

4) $1000 isn't gonna get you jack. :-) I wouldn't be surprised if this prices at $14-$15 per share, sold in 100 share lots. And I assume that there's a fee for the transaction, as well.

Good! (1)

mackga (990) | more than 15 years ago | (#1777563)

This ia a good example of how traditional ways of doing things just don't jibe with reality. Sure, some folks who participate in the IPO might loose some cash, but the almost instant response from the community to a practice that it deemed silly and not relevant and the reaction from the folks at e-trade really point out that business as usual doesn't always work with the OSS community. I'm stating the obvious, but I think it's pretty significant.

Re:Wink Wink Nudge Nudge (2)

ninjaz (1202) | more than 15 years ago | (#1777564)

I think the point here is that they're trying to cover their own asses.. If you lied on your signup form, you don't exactly have a strong case if you lose every last cent of your money because everyone decides Mandrake really is a lot cooler than Red Hat next week. ;) They also may be aware that free software developers aren't exactly the most litigious bunch to start with anyway.

Grow Up (1)

mattw2 (73314) | more than 15 years ago | (#1777565)

I wish all you Script Kiddies would grow up a little bit. You have no idea how the whole stock market work. Unlike in your 'Play World', there are rules in the real world so problems don't happen as often. If you've paying attention to the BeOS IPO, you'll notice that it's stock peeked and has now returned to almost the same price it opened at a week ago. This means a bunch of people earned a lot of money, it also means a lot of people have lost money. I wouldn't be surprised if the same thing happens with RHAT and you all loose your money.

30 days, but not really. (2)

mattdm (1931) | more than 15 years ago | (#1777566)

From e*trade's ipo faq:

When can I sell the shares I receive?

Once you receive notification of your allocation and the offering begins to trade in the
secondary market, i.e. on an exchange, you can sell your allocated shares. However, one
of the most important goals of the underwriting syndicate is to try to ensure a degree of
price stability for new issues. For that reason E*TRADE would prefer that customers hold
their allocated shares for at least 30 days. E*TRADE will not in any way impede the sale of
shares within this time, but customers with a record of short holding periods may be
excluded from future offerings.


Re:Well good.... (1)

MISplice (19058) | more than 15 years ago | (#1777567)

Check the literature.. some places have fall out prices that if they exceed 50% or more in gains then the holder can sell with no repercusions. This is so a client can lock in profits and have a good feeling for the company he trades with. If the company doesn't allow this find one that does.

Matter of fact the company I work for has a built in 30% increase you can sell unless otherwise specified by the business itself.

my 2 cents

Re:Not the answer I want to see. (1)

Saxgod (31101) | more than 15 years ago | (#1777568)


If you got the letter, call E*Trade (3)

Booker (6173) | more than 15 years ago | (#1777569)

I've seen a lot of people complaining that they couldn't get things done in time, couldn't find the link, etc. If you're serious about this, and you're having problems, then CALL E*Trade! There were some problems with their web site, etc. The phone support was helpful, and they were able to take care of all the problems I encountered. I ended up talking to a broker rather than using the web site. What a concept. :-)

Argh! (2)

Booker (6173) | more than 15 years ago | (#1777570)

Ya know, other than being clueless about the stupidity of a system where you get offered stock and are then turned down when you try to take advantage of that offer, I don't see how everyone here is so moronic.

You were not offered stock. You were offered the chance to apply for participation in this IPO, subject to all the standard rules and regulations of the E*Trade corporation and various governing bodies. What made this offer special is that you are in a smaller pool of applicants, making it more likely that if you are eligible, you may actually receive an allocation. It was stated in the letter that you would be subject to screening based on your financial background and investing experience, and a link was provided so that you could see exactly what this screening would entail.

Oh, and look at that. It seems that all the bitching and whining has had an effect.... E*Trade backed down!

I wouldn't say that they backed down - they gave you a chance to "correct errors" on your screening application. Their ass is still covered.

Re:Question (1)

rhaig (24891) | more than 15 years ago | (#1777571)

use the phone.

I know that may be a foreign concept, but the brokers are very helpful.

Not backing down in the least. (0)

Anonymous Coward | more than 15 years ago | (#1777572)

E-trade is NOT, repeat, NOT backing down and "letting people in" as the misinformed Mr. Poag claims. They are simply saying "hey, sorry you're not worthy, but if you feel like breaking the law and lying to us, we won't stop you." In other words, they are washing their hands of the whole affair - when people lie to them, and end up losing lots of money, they'll be able to say "well, we're not responsible, they lied to us, book 'em Danno."

This is not a victory for anyone who got rejected the first time, this is E-trade trying to save some face while further covering their ass. Don't believe the hype.

Re:Not the answer I want to see. (1)

xyzzy (10685) | more than 15 years ago | (#1777573)

Unfortunately, you will not see that answer. As has been pointed out, they are legally obligated to ask those questions.

If anyone has a problem here, it should be with the government imposing parental-style regulations over the behaviour of private citizens. Perhaps the open-source/slashdot effect/whatever should target their political representatives to get this fixed if they have a complaint.

so who wants my money? (1)

ncmusic (31531) | more than 15 years ago | (#1777574)

Anyone out there that got an invitation willing to pull together money and split the profits/stocks later? I just want to get in as close to the ground floor as possible then of course sell high for a quick profit. So who do i write the check too?

"People who buy stupid-ass shoes then complain about how uncomfortable they are should be kicked in the shin by someone in comfortable shoes." Anon

Clarification (1)

Bellwether (12891) | more than 15 years ago | (#1777575)

There is a separate Indication of Interest part of the website for letter holders, that has already opened. The general Indication of Interest has *not* yet opened. So if you received a letter, you can access the password/email address protected part of the IPO site.

Re:Purpose of an IPO (1)

Rabbins (70965) | more than 15 years ago | (#1777576)

Believe me, even if the entire OS community decides to hang on, Red Hat's stock will still soar and fall.

Almost every single IPO that has had anything to do with the Internet has followed that pattern. If you sell, you are not going to be hurting Red Hat... I am sure they are expecting this volatility. In fact, it will help them in getting news and notoriety "Hot Stocks".

Red Hat wants to raise capital and get noticed. They stand no chance of insuring long-term stock price stability initially.

Re:Well good.... (2)

MindStalker (22827) | more than 15 years ago | (#1777577)

Yes, but the basic rule of the market is, that if alot of people are trying to buy, and few selling, then the price goes up. Alot of people trying to sell and few buying, the price goes down. If most of the initial purchasers hold onto most of their stock then the price will rise until it reaches a point to where the price is high enough that people want to sell. If most of the initial ipo purchasers keep their stocks for close to a month without selling such an action would push the price up, even to the point of causing the stock to split, which can help the stock in the long term from falling too low.

Re:Watch WHO (1)

rfs (15926) | more than 15 years ago | (#1777578)

How do you go about finding this out? Whether institutional investors are investing, that is...

Etrade didn't back down. (1)

jgilbert (29889) | more than 15 years ago | (#1777579)

Etrade did not back down under pressure from the community. I called the hotline the same day I received the email and asked what the qualifications for the eligibility questionaire were. The woman on the phone then told me that as long as you picked "growth" and some experience you would probably get through and they don't do background checks to verify the data. This was about a week before the uproar.

Not quite... (1)

Rabbins (70965) | more than 15 years ago | (#1777580)

Remember, there is a buyer for every person selling (they just might not be willing to pay as much).

Most of the initial IPO purchasers are going to be institutional buyers, who are going to dump their shares into the public as fast as they possibly can. Our community here will make absolutely no impact whatsoever.

Splitting a stock is a choice of the company, it does not just happen. And no company has ever split their stock in the first month.

Within two days!!?? (1)

Rabbins (70965) | more than 15 years ago | (#1777581)

Go to a full-service broker.
The extra money that you will pay for commisions initially is worth being able to speak with someone when you need to.

Re:Grow Up (1)

gleam (19528) | more than 15 years ago | (#1777582)

Well, a way to work this situation (even though I've lost all respect for your comments because of spelling errors, grammatical errors, and your assumption that the recipients of this letter are "script kiddies") would be to buy 100 shares at IPO price, wait until it rises (and it *will*!) to about 80 or 100$ a share, and then sell short with a stop price of 40 or 50 (don't wanna get greedy). Once it starts dropping you're still making money. Sound good? That might be the way to go this week on tech stocks, which seem to be struggling (although most of them have already fallen enough...they're due for a rise as soon as Greenspan smiles on camera).

I'm actually not positive if NASDAQ will let you sell short, but I believe this method would work, and it's likely to earn you a chunk of cash if you expect the price to fall soon after the IPO.

Re:2nd time is a charm (1)

Greg@RageNet (39860) | more than 15 years ago | (#1777583)

I changed my profile... It was so sad, uncle john dying in that tragic plane crash; but the money he left me changed my financial status. *grin*

Anyway, max everything out and you'll get in. Buckets of Money: good, Experience: good, Lots of investment objectives: good, Affiliations with brokers/bankers/redhatters: bad.

I hope they never use these numbers to try to profile open source developers.. Writing free software will turn out to be the most lucrative profession in america. *laugh*

-- Greg

PS: The beeping I heard while they were taking my order was probably an indication of the call being recorded. They are doing serious CYA; so don't even think of blaming E*trade when you loose your shirt. And I wouldn't "stretch the truth" when it comes to family being affiliated with the IPO, I think you could end up in deep trouble with the law that way.

Re:We're a "Machine" (0)

Anonymous Coward | more than 15 years ago | (#1777586)

(Off Topic)
Word (both US and Intl. English) ships with spelling dictionaries (and thesauri, etc.) for *both* American and British. Just mark your text (Tools/Language/Set Language) as "English (United Kingdom)" and -ise, -our etc. words won't be corrected any more. Of course you can set this as default as well...

In fact, Word 2000 also ships with dictionaries for French and Spanish.

Re:Let go of E*Trade (1)

Eldrik (25881) | more than 15 years ago | (#1777588)

I sent E*TRADE an email message asking some questions about the Redhat IPO, and got a response back the next day.

I was pretty impressed.

Geek Mentality (1)

Rabbins (70965) | more than 15 years ago | (#1777589)

I have said this before, and I will say it again:

When it comes to investing, geeks generally lose a lot of money.

First: Most of you are idealists. You want the best technology available to succeed, and strongly believe that it WILL succeed.
--- But we can all name countless situations where the best technology has failed miserably.

Second: You try too hard. The best organization in America when it comes to picking stocks is the NAIC, or Investor's clubs... which are mainly composed of old ladies who meet once a month to buy stock!

To quote Peter Lynch,

"If you spend 2 minutes a year studying the economy, you'll have just wasted a minute and half."

Pick a good company with a steady earnings and good prospects for growth, evaluate its fundamentals and buy it. Hold on to it, and if you can, buy more if the stock price drops.

That is how you can become rich with stocks. But that is way too easy for most geeks!!!

Re:Ok, now, don't whine if you lose $$ (1)

spawn/nowait (68591) | more than 15 years ago | (#1777596)

I think the standard missive is :-

the value of investments can go down as well as up.

If you play with stocks / shares then only play with the money you are prepared to lose.

I expect from the previous postings that what they are doing at eTrade is covering their own back by only allowing "responsible" / "knowledgeable" traders to trade without "guidance".

Watch WHO buys... (1)

MISplice (19058) | more than 15 years ago | (#1777597)

I'll be watching to see how many institutional investors pick up on this. If I see a lot of them then hope you get your shares early, if not watch for a couple of weeks, you'll get a better deal.. unless of course the market reverses and the techs start rising again. Earnings are almost over, most the big guys have reported without much success so unless a lot of institutions buy in the open market I'm sure we will see Red Hat do what most of the rest of the new tech IPO's have done.. run up, run down, run up, run down... just gotta catch the right down.

Re:Grow Up (0)

Anonymous Coward | more than 15 years ago | (#1777598)

you misspelled 'lose'. hope this helps.

Re:Dishonesty (2)

Zack (44) | more than 15 years ago | (#1777599)

Simple... when the stock price falls to about $.01 a share and Joe Linux Geek looses all his money, then he can't hold them liable.

"But he SAID he had lots of expereince and could afford to lose money! It's not OUR fault!" And so they have their asses covered.

It's not about honesty, it's about liability...

Redhat makes money? (0)

Anonymous Coward | more than 15 years ago | (#1777600)

Where did you hear that from? Everything I've heard says that they lose money just like most other tech IPO companies. Wasn't there an article on /. about SuSe bragging that they actually turned a profit as compared to Redhat bleeding money?

I also doubt whether Redhat has a good public image. I wouldn't doubt the general public thinks that Redhat is competing with Microsoft; I doubt most people think that's a good long term position. Users of linux do not form a majority of the public.

Re:Grow Up (1)

Covener (32114) | more than 15 years ago | (#1777601)

Aren't people who have been offered the IPO [Open Source community contributors] pretty much the antithesis of Script Kiddies? Statements like that invalidate anything you have to say. Good thing it was only followed nonsense anyway.

I think RH has much bigger buzz associated with it than BeOS, they will take full advantage of the mainstram media attention linux has been getting as of late.

Hopefully the infusion of $$ the IPO will fund some interesting projects. I can't see this being a bad thing, barring an MS hostile takeover!

Re:I'm not sure if this is a great victory or not (1)

Rabbins (70965) | more than 15 years ago | (#1777602)

Most pure internet plays are down between 30 and 50% from their year highs.

Unfortunately, this is probably not even close to enough.

Eventually, these companies are going to have to comply with reality. By owning stock, you own a share of that company. As time goes on, your share of that company is going to be priced according to the "real" value of that company and its actual earnings and profitability. Yes, new industries are priced on potential, but is not going to run Barnes & Nobles and Borders out of business. And that is what they need to do, TOMORROW to warrant such a lofty market capitilization.

Yes, the internet is going to change the face of the Earth, but so did the radio, the telephone, the computer and the car. Look at your history... the bubble burst on all of these industries after the initial speculation craze.

Wait a bit, and let some of these companies prove they can actually *make* some money... at least with your savings that are important to you.

Re:Good! (2)

Jburkholder (28127) | more than 15 years ago | (#1777603)

How do you figure that? They didn't change any policies or procedures, did they? They are just letting people have another shot at *beating* the form with the 'right' answers. The only thing that is significant is that they are willing to look the other way to let people misrepresent themselves on the questionaire so they can get past the established policies. To me this just seems like damage control since they were in the midst of a huge PR backlash. Maybe I'm too cynical, but I don't see where the magic of the OSS community broke down any barriers or that any "silly or irrelevant" practices have been abandoned as a result. The questions and screening criteria are the same, you just have a second chance to change your answers to get past the 'cut'.

I hope this IPO goes well and a lot of people aren't burned. But, in reality, this is very risky (as are most IPO's) and a lot of people could really lose out. Me, I plan to wait for a couple weeks and see where the market prices this. If it goes to $50 an stays up, oh well - I missed out. If it goes to $50 in the first day, then settles back to $20 over the next week, I'll grab some and hold it for the long term. If it tanks to $8 after two weeks, I'll avoid /. completely so I don't have to see all the bitter complaining from everyone who sold their VW bug to scrape up $2000 to get in on the IPO only to watch it lose 50% of its value overnight (biting my tongue, hope it doesn't happen, but it *could*).

What the "letter" meant. (3)

Booker (6173) | more than 15 years ago | (#1777604)

Damn, I can't stop replying to this thread...

Well, anyway. Let's try to clear up some more misunderstanding.

Red Hat is having an IPO. They are issuing public shares for the first time. Some people will be able to get in at the initial price (currently estimated at $10-$12 per share) which is set before the stock trades publicly. Often, this price is significantly below the price that the stock will see on the first day of trading. On the first day of trading, anyone and their dog can buy shares by calling their broker or clicking their browser.

You did not need to get "the letter" in order to get in on the initial price. E*Trade customers and customers of other brokerages also have this opportunity. However, Joe Blow E*Trade customer will be competing with thousands of people for an allotment of shares. On E*Trade, it used to be first-come first-served, but now it's a lottery system, with shares allocated in 100-share chunks.

However, Red Hat has set aside 800,000 shares to be "directed" to the open source community. That's what the letter did - it gives you a (possibly) better chance to actually have shares allocated to you out of this pool, rather than the general public pool. It guarantees that up to 8,000 people will be able to purchase at leat 100 shares each. Of course, you must be eligible to participate in the IPO in the first place.

Getting the URL, the phone number, or the password from the letter will not help you out if you didn't actually receive the letter. E*Trade is screening for this - they know who Red Hat sent the letter to originally. If you try, you will most likely be barred from ever participating in any IPO through E*Trade in the future. Them's the breaks.

Re:Dishonesty (1)

xyzzy (10685) | more than 15 years ago | (#1777605)

Hey, it's no skin off their back. What people don't seem to realize here is that the questionairre is for THEIR protection, not yours. If you lie, and the stock you invest in falls through the floor, you have not one leg to stand on for a lawsuit (not that you do anyway -- when you sign up for ANY brokerage account you waive your right to sue and agree to binding arbitration).

Re:Well good.... (1)

Rabbins (70965) | more than 15 years ago | (#1777606)

Yup... most brokerage firms like you to hold on to it for at least a week. (Though it does depend on how much your broker likes you ;)

E-Trade actually forces you to keep them for two weeks. Although someone recently posted that you might be able to sell off 50% of your holdings initially. That is definitely what I would do.

Purpose of an IPO (0)

Anonymous Coward | more than 15 years ago | (#1777607)

Despite the hype that has been going around lately concerning the RedHat IPO, the real reason for an IPO is to generate capital and ENSURE LONG TERM STABILITY for the new stock. All of the people out there who are thinking "OH, I'll just jump in early and Sell high" will most likely be hurting Red Hat in the long term. While this might seem fine on the surface, much of the IT community is watching this IPO to determin the stability of the Open Source community. If Red Hat does well initially, and then the OSS community SELLS HIGH, and Red Hat plunges, what kind of message will that send to the general (IT) public?

Just a thought.

Re:Redhat makes money? (0)

Anonymous Coward | more than 15 years ago | (#1777608)

Actually, the report comes from first quarter earnings. Note that this was after the Red Hat Marketing Dept started advertising the then-upcoming 6.0 but before they started selling. The fact that they lost a little money (and 130K IS little in the grand scheme of things) is to be expected.

Re:Well good.... (0)

Anonymous Coward | more than 15 years ago | (#1777609)

Etrade does not force you to do anything
after you own the shares you are free to do what you want with them. But they want people to hold onto the shares for a long term investment because that is what the companies that are doing an ipo are hoping for. No company wants their stock to be extrtemely volitile, they want their stock to be so well liked that people don't want to sell it. A brokerage that can show that the buyers of the stock (the broker's customers) historically buy the ipo and hold onto it for long periods of time can usually get access to more ipos from future companies that want to ipo. If a broker is known for selling to people that pick up the stock and toss it into the market as soon as possible thus creating a volitile stock price (up AND down) then they will not get to ipo very many companies in the future (and the broker makes some good $ off doing an ipo so this is why they ask this of their customers)

Re:We're a "Machine" (1)

jd (1658) | more than 15 years ago | (#1777610)

Didn't you hear? Spelling(TM) was bought out by Microsoft, and all dictionaries now have to conform to Microsoft English, which will be renamed Winglish99.

Re:We're a "Machine" (0)

Anonymous Coward | more than 15 years ago | (#1777611)

That was my personal favorate part of the article: the "Slashdot Effect". Sounds like a bazzare experiment gone awry. Well that does sound familiar..

Re:2nd time is a charm (0)

Anonymous Coward | more than 15 years ago | (#1777612)

Could you tell us a little bit about your "adjusted" self? Like hundreds of others who got the letter, I want to be just like you :)

If the check cleared, phone E*TRADE now (1)

WillAffleck (42386) | more than 15 years ago | (#1777613)

I just phoned them and cleared it all up.
It's the 1-888 number in the letter.

We're a "Bot" (1)

WillAffleck (42386) | more than 15 years ago | (#1777614)

Heck, we're not one of those old, tired "Machines". We're one of those new, cool "Bots".

Never mind that it's 20th Century, they think it's new, so revel in your "Bot" status.

Resistance is Futile.

whatever (0)

Anonymous Coward | more than 15 years ago | (#1777617)

There is absolutely no reason what so ever why the "old" way shouldn't work in this case. Unless you want to try to make the claim that open source software developers are super savvy financial whiz kids compared to the average investor...they simply are poor.

Face it, for most people (OSS developers included), investing in Redhat makes about as much sense (and was thought out as thoroughly) as investing in the IPO of a company with the same name as your favorite color.

Get off the OSS developers are the pinnacle of human evolution and no rules should bind them trip. Unless, of course, you can give one actual reason for why investing business as usual shouldn't apply to the OSS community? Maybe they shouldn't be bound by insider trading rules as well? And maybe their bank deposits shouldn't be federally insured? Maybe companies shouldn't have to disclose their earnings to OSS developers?

why etrade...? (1)

mebob (57853) | more than 15 years ago | (#1777618)

Why is etrade? I intended to get my hands on some of that... but I don't use etrade....

Re:We're a "Machine" (0)

Anonymous Coward | more than 15 years ago | (#1777619)

you misspelled 'organized'. hope this helps.

Right On! (0)

Anonymous Coward | more than 15 years ago | (#1777620)

I don't care if some moderator got his feelings hurt and marked your post "Flamebait". You've made a real good point.

Here's a taste of irony -- Hey slashdotters! You know those suits you guys like to call idiots? The ones who can't figure out how to get a dial-up connection in Linux?

Guess what -- your cluelessness about stock trading, the SEC, and IPOs makes you an idiot next to those suits. They're snickering because you can't figure out how to set up an E*Trade account. They're shaking their heads because you have ZERO experience with investing, but suddenly you want to get in on the ground floor of an IPO -- real safe way to spend money, that. I guess putting that extra $1000 in an index fund is too boring -- gotta get in on the open-source internet stock craze!

Best of all, you're bitching about it! Hundreds of serious investors have managed to set up accounts with E*Trade, but it's too darn complicated for "geeks". Let's flame them for trying to protect us from our own inexperience!

You guys mock the suits, but now you're in their arena, playing their game. If you don't make any money, maybe you'll at least learn some humility.

Huh? (0)

Anonymous Coward | more than 15 years ago | (#1777621)

That doesn't say that E-Trade is backing down at all.

Re:Dishonesty (2)

EisPick (29965) | more than 15 years ago | (#1777622)

Doesn't anyone value honesty anymore?

Not in the finance industry, I guess. The loan officer for my mortgage (who was working on commission) taught me how to, ahem, overstate my assets without getting caught by her colleagues on the loan approval committee.

I got the loan, and seven years later, I haven't defaulted yet.

Re:Redhat makes money? (1)

Hackboy (5933) | more than 15 years ago | (#1777623)

Where did you hear that from? Everything I've heard says that they lose money just like most other tech IPO companies. Wasn't there an article on /. about SuSe bragging that they actually turned a profit as compared to Redhat bleeding money?

I wouldn't exactly call it bleeding money. The ratio of their losses to their earnings is pretty small. They could easily become profitable by cutting costs and slowing growth, but they are much more interested in growing the business right now.

Load More Comments
Slashdot Login

Need an Account?

Forgot your password?