Mandrake in critical condition ----> Continued

James Leone linuxcpa at
Sat Dec 21 07:25:26 CST 2002

James Leone wrote:

> Despite being ranked the favorite distribution in the Linux Journal 
> Reader's choice awards...
> I received this in my email today directly from Mandrakesoft:
>> Despite the many financial challenges of maintaining a fully open source
>> business model, MandrakeSoft has always followed the Free Software 
>> approach,
>> but in this normally joyful holiday season we are experiencing a serious
>> short-term cash crisis.
> This troubles me.
> Right now Mandrake is asking for financial help, and I hope that they 
> receive it.
> I am concerned that their request for help might leave the general 
> public with some general confusion that may dampen their effort to 
> raise funds.
> Some people will hold that because Mandrakesoft is legally organized 
> as a business, and not a public charity, that this is a bad 
> investment, and not see it for what it is: a request for donations.
> That being said, I feel very stronly that Mandrake should follow 
> Debian's lead and organize as a not-for-profit public charity.
> **************************************************************************************************** 
> I have also read recent reports that Red Hat has turned a profit this 
> quarter.
> But I have also noticed that a Robert Young has been selling his Red 
> Hat shares in a spurt that started on 8-29
> I will continue, I have to go to a clients...

Ok, I am back.

Now the suprt of stock sales may be just a coincidence.

Anyway, here are the results from last quarter...

It appears that they lost 1,951,000, last quarter, so this report looks 

One nore of Red Hat's financial statement notes was interesting:

> NOTE 6—Discontinued Operations
> During January 2002, the Company adopted a formal plan to discontinue 
> its network consulting operations. Accordingly, the network consulting 
> operations were accounted for as a discontinued operation beginning 
> with the fiscal year 2000 consolidated financial statements. The 
> Company completed the disposal of the network consulting operations in 
> February 2002 through termination of associated employees. Loss on 
> disposal of discontinued operations of $10.3 million in fiscal year 
> 2002 included the write-off of goodwill recorded in the acquisition of 
> ENS of $9.6 million, severance and related costs of $0.4 million, and 
> a provision against accounts receivable of $0.3 million. An additional 
> provision against accounts receivable of $261,000 was recorded during 
> the three months ended May 31, 2002. Network consulting revenues were 
> $2.2 million and $6.4 million during the three and six months ended 
> August 31, 2001, respectively.

> James Leone

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