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Linspire Drops IPO Expectations

Officials at Linspire, the company once called Lindows, dropped expectations on the value its stock will take in when it launches an initial public offering (IPO) on the NASDAQ stock exchange, the second time in as many days.

The company, which develops a commercial OS based on the open source Linux kernel, has in recent days been dropping signals its IPO wouldn't be nearly as successful as executives had hoped when they first filed with the Securities & Exchange Commission (SEC) April 20.

Linspire initially hoped to garner between $39-$48.4 million on 4.4 million shares of common stock from its IPO. But according to recent amendments to its original S-1 filing with the SEC, officials have nearly halved that amount.

One amendment, filed Wednesday, dropped its per-share expectations from the $9-$11 range to $7-$9. The next day, Thursday, Linspire dropped that number again to $5-$7 per share, putting its IPO total between $22-$30.8 million.

The price drops come in large part from Linspire's recent second quarter 2004 financial statement. Officials reported more than $3 million in operating expenses on revenues of $724,000.

The company has received a lot of media attention in 2004, more for its legal battles against software giant Microsoft than for the popularity of its software.

Linspire was originally Lindows, a name Microsoft took exception to because it was too close to "Windows." Microsoft originally tried to get the U.S. courts to make Lindows change its name. Not finding any relief in American courts, Microsoft got a favorable judgment in Amsterdam, where a judge ruled Lindows needed to change the name of its software brand, but could keep its corporate identity.

So it came as some surprise when Lindows, Inc., officials announced in July they were settling with Microsoft, after successfully fighting to a draw with the software giant. In return for $20 million, Michael Robertson, Lindows CEO and former owner of MP3.com, agreed to give up the Lindows name entirely and re-brand the company and software under the Linspire name.