Subject: Re: I believe your VA numbers
From: Crispin Cowan <crispin@cse.ogi.edu>
Date: Thu, 09 Dec 1999 23:43:38 +0000

Ben_Tilly@trepp.com wrote:

> But...
>
> *BOGGLE*

Indeed.


> Of course the purchasing power and name recognition from the stock price
> will help increase their real value, but the Linux bubble is going to pop
> at some point and it will NOT be pretty.

I suspect (also IMHO) that what is driving this particularly goofy bubble is
the relative scarcity of Linux shares.  By only offering a few shares and a
tiny fraction of the company's value, VA made owning a piece of VA a scarce
proposition, driving up the price.  The price will stay high as long as
demand continues for Linux companies (which I believe) and supply of Linux
company shares remains scarce (much more questionable).

To kinds of things could drive down the value of VA and RH:

  1. either one of them starts dumping major quantities of their retained
     shares, i.e. by my hypothetical "buy Gateway with stock" plan
  2. a lot more companies IPO, providing a much bigger pool of Linux shares
     for investors to chase, e.g. if SuSE, Caldera, and Mandrake also IPO,
     and dump lots of shares on the market in the process.

Of course, this stock market is insane, so if #2 happens, the market could
just decide that this "Linux thing" is even hotter than they thought, and
pour even more money into it, as they have done with the "dot com" crowd.

On a global scale, I continue to believe that this stock market is soooo
goofy because of the amazing amount of money pouring into the stock market
itself, altering the supply:demand mix.  When the baby boomers start
retiring en masse in 2010, money will start to pour back out of the market,
and valuations will fall back to a sane level.  Thus, 2009 would be a good
time to move investments from dot-com's and Linux companies into medical,
retirement, and vacation companies.  Go get the AARP's advertiser index ...
:-)

Crispin