Monday eMailbag: LinuxOne, Insweb, Green Shoe
LinuxOne should be going public soon. What do you think of the
Reply: I’ve written a few articles on the subject of Linux
– and they
have, by far, generated the most interesting (and heated) emails.
Okay, here I go again. In a word, my opinion on LinuxOne is:
Revenues? Zero (the company was started in March of this year).
Well, it’s OK. Also, the company is planning to raise a small
money (about $25 million), which is paltry compared to RedHat and
However, I would not be surprised if LinuxOne had a nice pop on
day – given the fact that Linux is red hot. But for the
long-term, I would
The most amusing part of the IPO is that the prospectus has many
that are word-for-word from the RedHat prospectus. Then again,
is using a small underwriter (Capital West Securities).
InsWeb: What’s the Best Policy?
What’s your take on InsWeb?
Reply: I’ve been a fan of InsWeb
for some time. Just like any other financial product, insurance
Web distribution model. Users can make price comparisons; learn
intricacies of insurance; and so on.
InsWeb has agreements with 49 insurance companies covering auto,
renters, term, health and even pet insurance. In fact, Gomez
ranked the site the No. 1 for online insurance. InsWeb also got
ranking from Lafferty Information and Research Group.
InsWeb has been able to capitalize on its leadership. In the
quarter, revenues were $7 million, which was a 39% sequential
the quarter before and a 457% increase from the same period a
The company should be able to increase the momemtnum, as the
recently launched a two-year $75 million marketing campaign and
variety of distribution deals, such as Morningstar, ZDNet and
I’ve been following IPOs lately. I’ve heard the word ‘green
does this mean?
Reply: In the underwriting agreement, there is a clause
that is known
as the overallotment provision. The less technical name is
Interestingly enough, the phrase was first used with the Green
The clause allows the underwriter to purchase an extra amount
several weeks after an IPO (the amount can be as much as 15%).
the underwriter will exercise this option when the stock goes