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

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

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, agreed to give up the Lindows name entirely and re-brand
the company and software under the Linspire name.

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