VA Software

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Template:Infobox Company$29.261 million USD (2004)|

 num_employees  = 122 (2004)|
 homepage       = www.vasoftware.com|
 num_people     = unknown

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Image:LNUX.png VA Software Corporation (Template:Nasdaq), formerly VA Linux Systems, is the provider of the SourceForge Development Intelligence application.

VA Software is headquartered in Fremont, California. OSTG, the Open Source Technology Group, is a subsidiary of VA Software, also headquartered in Fremont.

1 Early history
2 Initial Public Offering
3 VA Software Today
4 External links

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Early history

Founded in 1993 as VA Research, the company started as an operation in which Stanford graduate student Larry Augustin, along with partner James Vera (both Augustin and Vera were colleagues of Jerry Yang and David Filo at Stanford, who would go on to found Yahoo!), built and sold PC computer systems pre-installed with the Linux operating system as an alternative to much more expensive Unix workstations available at the time. At the time they started operations, they were one of the first computer vendors to offer Linux as a pre-installed OS. During the initial years of operation, the business was quite profitable and grew quickly, with over $100 million in sales and a 10% profit margin in 1998 [1] and was the largest vendor of pre-installed Linux computers, having approximately 20% of the Linux hardware market.

In early 1999, VA purchased their top competitor, Linux Hardware Solutions. As part of this merger, VA Research changed their name to VA Linux Systems to capitalize on their Linux products, and began to make plans for an Initial Public Offering. VA also won a business plan competition that year for the right to operate the linux.com domain, although it was rumored that Microsoft and other bidders (Compaq, Red Hat, HP) had offered more cash but less plan for the domain.

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Initial Public Offering

VA Software is notable because of its Initial Public Offering on December 9, 1999. The shares for the IPO were offered at $30, but the traders held back the opening trade until the offerors hit $299. LNUX later popped up to $320, and closed their first day of trading at $239.25, a 698% return. However, this high-flying success was short-lived, and within a year the stock was selling at well below the initial offer price, in a classic example of the dot-com stock market bubble. As of 2005, this is still the most "successful" IPO of all time.

Many authors of free software were invited to buy shares at the initial price offering as part of a friends and family deal.

Using the stock symbol LNUX caused confusion; some day traders bought shares because they thought the company owned the rights to Linux.

Due to the immense difference between the IPO offering price and the opening price, VA Linux did not actually raise much capital in the offering, and the stock price sagged as investors realized that the company's revenue and profitability were not likely to justify the share price. However, on February 3, 2000, the company announced that it was acquiring Andover.net (itself a recent IPO company, later known as the Open Source Developers Network and then the Open Source Technology Group). This gave them Slashdot and other software development news resources, a move that shifted much of VA Linux's business model to software development.

The company also faced increased competition from other hardware vendors offering Linux as a pre-installed operating system (Dell, in particular), and the company began to experience operating losses. Eventually, on June 26, 2001, VA Linux decided that they would leave the systems hardware business and focus on software development[2].

On December 6, 2001, the company formally changed its name to VA Software in recognition that the majority of their business was now software development. However, the company's Japanese subsidiary still goes by the name of "VA Linux Systems Japan K.K." after the parent company changed its name. On January, 2002, Sumitomo Corporation became the largest shareholder in VA Linux Systems Japan, and the Japanese subsidiary became independent of VA Software.

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VA Software Today

VA Software's Open Source Technology Group (OSTG) operates SourceForge.net, Slashdot, Linux.com, IT Managers Journal, NewsForge, and Freshmeat. VA licenses SourceForge Enterprise Edition (as of January 2006 at version 4.3) to enterprise organizations. VA Software also runs SourceForge on Demand -- an instance of SourceForge for private development (unlike SourceForge.net where all projects must be open, and code developed must be released under an Open Source license). Thinkgeek.com -- an ecommerce site -- is also under the VA Software banner. VA Software sold Animation Factory in late December 2005. Tue, Feb 21 2006, VA Software reported its first ever profitable quarter. Net income for the second quarter stands at $10.5 million, or 17 cents per share, compared to a net loss of $702,000, or a penny a share, in last year’s second quarter. LNUX stock rose 60% before the announcement and 40% afterwards.

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