Running an Internet Startup Not Always That Easy

Redhat's Stock Offering to Developers Not Working Out as Planned

from the go-ahead,-take-our-money dept

Wed, Jul 28th 1999 4:28pm — Mike Masnick

So it seems that many of the folks that Redhat offered "friends and family" IPO-priced shares to cannot get them as E*Trade requires IPO traders to have a certain amount of experience and net worth to trade in IPOs. This brings up a mixed reaction for me personally. As I've said before, I don't like the idea of giving out stock to the public on the assumption that it's a definite "reward" as traders should realize it really (really!) is possible for stock to go down and people to lose money. All that E*Trade is doing is weeding out investors who may not realize that or may not be prepared to handle it. However, because of the sillyness of our markets, the fact is, it should be a pretty safe bet, and Redhat is just trying to reward folks who helped them out.

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Seldon, 28 Jul 1999 @ 11:03pm

A better approach
I think that if Red Hat is really concerned about giving a reward to those developers ( and I think they should ) it would be better if they give them some stock options. In that way after the IPO, Red Hat would sell them shares ( if the IPO goes well ) at a lower price ( the one set for the initial offering ) and cash in the difference ( as public companies do with their employes ). That way, there'd not be any risk and it would really be a prize.
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Mike (profile), 30 Jul 1999 @ 11:03am

E*Trade tells them to lie
That same article listed above has been updated (originally it said there was no comment from E*Trade). Now, however, apparently E*Trade sent out a note telling people to "try again" and perhaps they had filled out the original incorrectly... There are also quotes from people at E*Trade suggesting that spurned developers lie on the form, because it's not like E*Trade is going to check up on them. Anyone else think this is a little questionable?
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