November 2, 2001

Open Source stock report: The VA name game and Sun's bravado

Author: JT Smith

- By Dan Berkes -
VA wants to be the company formerly known as Linux, Sun tells reporters

that it's built to last, and Caldera ships 64-bit distribution. Also:

Apple hit with more lawsuits, IBM pays up.

The Dow Jones Industrial Average ended Friday at 9,323.61, down 222

points from the close of business for October 26. Nasdaq's composite

index closed out the week at 1,745.73, down 23 points from last Friday.

The market took some sharp plunges during the middle of this week as

investors seemed to once again realize that no quick turnaround was in

sight for the ailing economy.

Part of that reality check came from the U.S. Department of Labor's monthly

jobless report, showing the unemployment rate rising from 4.9 percent

in September to 5.4 percent in October. American employers slashed

415,000 jobs during the month of October, the most job cuts the country

has seen since 1980.

"It wasn't anything we hadn't been expecting. These numbers are showing

the effect of the Sept. 11 attacks on the economy," said analyst Kim


"[Employment numbers] are a lagging indicator," said Dahowski, "and

even if the economy does a turnaround as planned by the middle of 2002,

we may still see an 8 percent unemployment rate by next June."

The jobless numbers may have actually helped the market this week. U.S. Federal Reserve policy makers are meeting this Tuesday and they are expected to

make a 10th cut to short-term interest rates in an effort to keep

consumers spending money.

VA taking Linux out of name
NewsForge parent company VA Linux wants

to take the "L" word out of its name. The company will ask its Board of Directors to approve changing the name of the company to VA Software

Corp., according to paperwork filed Tuesday with the Securities and

Exchange Commission.

The official company line is that the name VA Software is more in line

with the company's core business of developing its SourceForge

collaborative software development program. Critics have charged that

VA merely took advantage of the Linux "buzz factor" of the late '90s,

and now wants to distance itself as far away as possible from the Linux

market segment.

IBM: Buybacks, dividends, and self-healing computers
Big Blue was given the go-ahead by its board of directors to buy up to

$3.5 billion of the company's public shares. With a similar buyback

arrangement approved in April, the company has so far repurchased $4.3

billion of its shares. IBM said it would make the purchases on the open


Also on Wednesday, the IBM board declared a regular quarterly cash

dividend of 14 cents per common share. The dividend will be paid out on

December 10 to all stockholders of record listed no later than November


On the technology side of IBM's business, the company announced a new service that offers the promise of a computer that can heal itself when something goes wrong.

While the goal is to let machines manage themselves, the IBM package

comes in a services offering that will require about 20 weeks of

initial consulting and $30,000 to $100,000 per month in ongoing

maintenance from the company's Global Services division.

Sun: We're built to last
"We've got $6 billion in cash, no debt. Short of a multibillion dollar

embezzlement, I think we are in pretty good shape to ride out, you

know, a two or three year economic storm," Sun Microsystems CEO Scott

McNealy told reporters on Wednesday. The news will, hopefully for Sun's

sake, reassure nervous investors bitten by two quarters of downturns

after almost a decade of profits.

Apple: No buyback and a tale of two lawsuits
Investors waiting to offload AAPL during an aggressive company buyback

plan can keep holding their breaths. At a technology conference in New

York on Wednesday, Apple v.p. of finance Peter Oppenheimer told the

audience that his company needs its $4 billion cash reserve to retain

employees and reassure customers of the company's viability.

As Apple found out when consumers didn't flock to its now discontinued

G4 Cube, the computer-buying public can be very fickle. That's nothing

compared to a disgruntled shareholder, however, and that leads us to

the recently-announced class action lawsuits against the Cupertino,

Calif., company.

The suits allege that Apple lied to its investors when it promised a

bumper crop of fourth-quarter 2000 profits thanks to new products based

on the G4 PowerPC processor, including the G4 Cube and Power Mac G4

Dual Processor. Just a few weeks later, the company announced record

losses for the fourth quarter. (Schiffrin &

Barroway announcement) (Cauley Geller

Bowman & Coates announcement)

Caldera ships new OpenLinux
On Wednesday, Caldera

International announced the release of OpenLinux 64 3.1, a

distribution of Linux server and workstation software designed for use

on Intel's 64-bit Itanium processors. According to the official

announcement, this is the first version of OpenLinux from the

Utah-based software company that supports Intel's new 64-bit processor


HP sends Tux to Seattle
In an SEC filing made Tuesday afternoon, Internet retailer Amazon said

it was able to cut technology costs by nearly 25 percent last quarter,

in large part because it adopted Linux. Company executives wouldn't

mention the specific role Linux played in the Amazon system, but did

credit Hewlett-Packard for helping them make the move.

Here's how Open Source and selected technology stocks ended this week:

Company Name Symbol 11/02 Close 10/26 Close
Apple AAPL 18.57 18.67
Borland Software Int'l BORL 11.16 12.09
Caldera International CALD 0.28 0.30
Hewlett Packard HWP 16.92 17.85
IBM IBM 109.50 111.16
MandrakeSoft 4477.PA e2.75 e2.61
Red Hat RHAT 4.40 4.88
Sun Microsystems SUNW 11.44 10.40
TiVo TIVO 5.35 5.38
VA Linux Systems LNUX 1.26 1.45
Wind River Systems WIND 14.23 15.70


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