Turbolinux scuttles IPO plans
Citing current market conditions, the software firm scotches its initial public offering aimed at raising $60 million for its lean corporate coffers.
The Brisbane, Calif., company filed Monday with the Securities and Exchange Commission to withdraw its offering, blaming "current market conditions."
While he acknowledged the downturn in the market, Jerry Greenberg, senior vice president of worldwide marketing for TurboLinux, said the move had been required by the SEC after the company merged with services provider Linuxcare.
"That was a substantial change for us," he said. "We were required to withdraw it to redraw our plans." Plans to refile for an IPO are "still up in the air," he said.
The company's canceled IPO comes as Linux companies are struggling to survive amid the general tech slowdown and the evaporation of investor enthusiasm for Linux-centered business plans. Last month, Turbolinux and services provider Linuxcare announced layoffs days before the two companies completed a merger.
Turbolinux had applied last October for listing on the Nasdaq exchange under the symbol "TLUX," despite the stock market's waning support for Linux companies.
Greenberg distanced the company from the besieged Linux market. "We are much more than a Linux company," he said. "More of our revenue comes from other sources than from Linux. Even though we have one of the major distributions, it is not our primary claim to fame."
While Turbolinux may be relying less on Linux software, the company is a major force in the commercial Linux market. Market researcher IDC ranks Turbolinux as the No. 3 player, behind Red Hat and SuSE, in the market.
With the tremors in the Linux market, Turbolinux's decision to take a step back from the stock market is a good one, said IDC analyst Dan Kusnetzky.
"I don't think it has anything to do the state of TurboLinux and Linxucare," he said. "There are a number of forces that have aligned to make this market a difficult one, and they are wise to pull back from that."
The company was started in 1992 and has received $100 million in private funding from more than 30 computing companies and investment houses, including Compaq Computer, Dell Computer, Deutsche Banc, Fujitsu, Hitachi, IBM, Intel, NEC, Novell, Oracle, SGI and Toshiba.