|
|||
But the real commercial basket-case is VA Linux, which has decided to get out of the hardware business (which was originally its entire business). In a supreme irony, at this point VA Linux consists of little more than ex-Andover.net. But then there's damned little surprise about this actually. VA Linux is bleeding money like its carotid had been severed. In the quarter ending 20010428, it had a net loss of $109.7 million on sales of just $20.3 million. For every dollar in revenue they spent $6.39. Even for a dot-com that's impressive. The trends are horrible: from the year ago quarter sales dropped 40%, but expenditures rose 135%. Even more scary is negative cash flow of $56.8 million in that quarter, leaving VA Linux with just $67 million in cash and cash equivalents. Total convertible assets were $131.1 million at the end of April. Of about $450 million in stockholder equity, nearly two thirds is "goodwill and intangible assets" (which means things which can't be turned into cash upon bankrupcy). Of course, there's no reason to believe that these trends changed in the last seven weeks, so their financial picture will be even worse now. (If they've continued bleeding cash at the same rate, they're down an additional $30 million by now.) A few days ago there was an outage which shut down SlashDot for a couple of days. It was actually a router failure, but some wags suggested that VA Linux had decided to shut down. At this rate, next time that really will be the reason why -- and it's likely before the end of the calender year. After years of red ink, the board at Corel finally decided last year, as Corel lay on its deathbed, that Michael Cowpland was not an asset. Corel just announced its second consecutive profitable quarter, despite the bad times. I wonder whether VA Linux's board might need to consider how valuable Larry Augustin really is. (I bet he's got a doozy of a golden parachute.) (discuss) Update 20010628: This rings hollow now. |
|||
