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Geeknet (LNUX) Smoking Guns or An Open Letter to the Geeknet (LNUX) Management and Board of Directors.

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June 12, 2010 – Comments (9) | RELATED TICKERS: YHOO , GKNT , BBY

Geeknet (LNUX) Smoking Guns or An Open Letter to the Geeknet (LNUX) Management and Board of Directors.

1. Geeknet (LNUX) numbers continue to disappoint

2. Geeknet (LNUX) - Large Institutional 13D Shareholder Put Pressure On Board Demanding to Unlock Value. Where is Geeknet now 21 Months Later? Source: Motley Fool, November 25, 2009. Where are we today? (28 months later) LNUX closed at $1.78 on February 15th, 2008. This article ( Taking the Street.com ) was originally published on Monday February 18th 2008.  LNUX closed at $1.36 Friday, June 11th, 2010. In other words, LNUX management has incurred 23.59% shareholder value destruction since Trivium made this demand of LNUX Management and its Board of Directors on February 14th, 2008. To put this into perspective note what has changed since February 2008. See Trivium Capital Management Sends SourceForge a 13D Valentine

3. Alleged suspicious patterns of insider trading by Geeknet insiders viz-a-viz Sarbanes-Oxley, SEC Rule 10b-5. And here SourceForge (LNUX) CFO Continues Dumping Position, Group Media President Joins on Eve of Announcing Q2 CC

4. iCade false advertising latest (June catalog) (naivete with ThinkGeek and Geeknet management) and exposes Geeknet (LNUX) to a substantive risk of lawsuits.

5. Why hasn't the Geeknet Board of Directors changed the stock symbol to NASDAQ:G33K or something equally appropriate/consistent given Scott Kauffman has changed SourceForge (LNUX)'s direction, name, branding, et al since his arrival to everything geek? and accordingly why isn't there there a (NASDAQ:GEEK) IPO in place for >= $100 Million for the obvious fact that Geeknet's revenue breakdown for q1 ending March 31 2010 was 70.74% eCommerce. Media revenues accounted for 29.26% of total revenue. eCommerce revenues increased by 59 percent in the first quarter of 2010 as compared with the same period last year. Note: Accordingly, Kauffman and the Board of Directors should always be positioning Geeknet (LNUX) for an acquisition/bidding war between obvious suitors e.g. Yahoo (YHOO), Amazon (AMZN), Best Buy (BBY), et al if nothing else than to price its share appropriately.

6. There are currently no Corporate events scheduled on the Geeknet website.

7. There has not been nor are there any analyst meetings, investor conferences scheduled under Investor Events.

8. There has been only one Blog on the Corporate website on http://sourceforge.net/downloads/ . And when you click the 'About' link on this major April 13, 2010 press release about SourceForge.net this*is what is stated (see below). (Project stats are from February 2009 and unique visitor stats are from December 2008).

9. Scott Kauffman was effectively unemployed when hired.

10. With all due respect Matt Sweeney was effectively unemployed when hired (and worse?) (incl comments 1-5). Matt Sweeney's background is exclusively media revenue. Geeknet's revenue breakdown for q1 ending March 31 2010 was 70.74% eCommerce. Media revenues accounted for 29.26% of total revenue. eCommerce revenues increased by 59 percent in the first quarter of 2010 as compared with the same period last year. Accordingly, why hasn't Geeknet (LNUX) brought on a senior level executive from Best Buy or Amazon.com as Chief eCommerce Earnings Officer of Geeknet or COO of ThinkGeek?

11. Media sales represented 44.8% of revenues for the quarter immediately preceding Kauffman's arrival for the 3 months ended October 31 2008. http://secfilings.com/searchresultswide.aspx?TabIndex=2&FilingID=6292235&type=convpdf&companyid=68081&ppu=%2fdefault.aspx%3fformtypeid%3d%26amp%3bindustryid%3d%26amp%3bticker%3dLNUX%26amp%3bauth%3d1

12. Mike RudolphChris Dobbrow, and Jay Seirmarco were the core mgt team responsible for media sales/market share (deteriorating) and are still there as Geeknet (LNUX) continues to reflect consistent patterns of their failure to stop the decline in media sales, and their failure to increase both media sales and SourceForge and Geeknet (LNUX) shareholder value...but they continue to accept hundreds of thousands of free shares. Source: Secfilings.com

13. Scott Kauffman (and the Board of Directors) have exhibited consistent patterns since Scott Kauffman's arrival as CEO in failing to engage the street viz-a-viz analyst meetings and investor conferences as a baseline management effort in maximizing a publicly-held company's shareholder value, in general, and Geeknet (LNUX) in particular.

14. There is no one at the senior corporate Geeknet management level with any retail/eCommerce background, yet again, Geeknet's revenue breakdown for q1 ending March 31 2010 was 70.74% eCommerce. Media revenues accounted for 29.26% of total revenue. eCommerce revenues increased by 59 percent in the first quarter of 2010 as compared with the same period last year.

15. Slashdot appears to be becoming irrelevant while recently acquired Geeknet (LNUX) Geek.com has more timely/breaking geek/tech articles. Also see Geeknet (LNUX) Slashdot Nemesis "Digg loses a third of its visitors in a month: is it deadd?" and "Will Slashdot be Overtaken by Digg?" January 2006 for more recent corroboration of Slashdot's declining influence/market share.

16. Including but not limited to the above...Geeknet (LNUX) Board Director and beneficially effective controlling shareholder, Suzanne Presentcontinues to accumulate Geeknet (LNUX) shares...and awarded 10,000 shares at $.001 quid pro quo as a Director for said non-performance.

17. Geeknet (LNUX) Directors Present, Sileck, and Bowman Former (NYSE:WWE) DIrectors/Officers now control 42% of LNUX Board

Geeknet (LNUX) non-insider shareholders simply expect a tight company, a management team that is diligently and indefatigably maximizing insider and non-insider shareholder value with superior corporate governance and transparency, and a Board of Directors that oversees and is responsible and accountable for that happening...nothing more, nothing less.

Geeknet (LNUX) shareholders must accordingly make timely decisions and actions regarding this management team and incumbent non-responsive Board of Directors

___________________________

*About (as of June 12, 2010)

What is SourceForge.net?

SourceForge.net is the world's largest open source software development web site. We provide free services that help people build cool stuff and share it with a global audience. See a list of our software development features.

As of February, 2009, more than 230,000 software projects have been registered to use our services by more than 2 million registered users, making SourceForge.net the largest collection of open source tools and applications on the net.

About Geeknet, Inc.

SourceForge.net is owned and operated by Geeknet, Inc., a publicly traded US-based company.

Geeknet's media and e-commerce web sites connect millions of influential technology professionals and enthusiasts each day. Combining user-developed content, online marketplaces and e-commerce, Geeknet is the global technology community's nexus for information exchange, goods for geeks, and open source software distribution and services. Geeknet's network of web sites serves 34 million unique visitors each month* and includes: SourceForge.netSlashdotThinkGeek, and freshmeat.net. (*Source: Google Analytics and Omniture, December 2008.) [emphasis added]

9 Comments – Post Your Own

#1) On June 12, 2010 at 2:09 PM, gnulaw (51.59) wrote:

18. Geeknet (LNUX)s iPhone App is broken.*

19. Why isn't SourceForge.net leading a major and what could be infinitely exciting Open Source competitions in the mobile smartPhone area?  

 *SourceForge Releases iPhone ApplicationMOUNTAIN VIEW, CA, Jul 10, 2008 (MARKET WIRE via COMTEX News Network) -- SourceForge, Inc. (NASDAQ: LNUX), the leader in community-driven media and e-commerce, today announced the release of an application for the iPhone and iPod Touch that will allow users to easily view and explore the latest news items from the SourceForge web sites. The application, called "SFNetNews," will provide content from Slashdot, SourceForge.net, and freshmeat.

"Breaking news on high-tech topics is extremely well-suited for the iPhone," said Jon Sobel, group president, SourceForge Media. "Slashdot readers, in particular, are heavy users of cutting-edge devices, and the iPhone is no exception. We're very excited to provide them with a superior mobile browsing experience."

The application will be available free of charge on the Apple App Store.

About SourceForge, Inc.

SourceForge's media and e-commerce web sites connect millions of influential technology professionals and enthusiasts each day. Combining user-developed content, online marketplaces and e-commerce, SourceForge is the global technology community's nexus for information exchange, goods for geeks, and open source software distribution and services. SourceForge's network of web sites serves 32 million unique visitors each month* and includes: SourceForge.net, Slashdot.org, ThinkGeek.com, Linux.com, freshmeat.net, ITManagersJournal and NewsForge.com. For more information or to view the media kit online, visit www.sourceforge.com. (*Source: Google Analytics and Omniture, April 2008.)

SourceForge, SourceForge.net, Slashdot, freshmeat, and ThinkGeek are registered trademarks of SourceForge, Inc. in the United States and other countries. All other trademarks or product names are property of their respective owners.

Source: http://ir.corp.sourceforge.com/phoenix.zhtml?c=82629&p=irol-newsArticle&ID=1173902&highlight= 

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#2) On June 12, 2010 at 2:09 PM, gnulaw (51.59) wrote:

18. Geeknet (LNUX)s iPhone App is broken.*

19. Why isn't SourceForge.net leading a major and what could be infinitely exciting Open Source competitions in the mobile smartPhone area?  

 *SourceForge Releases iPhone ApplicationMOUNTAIN VIEW, CA, Jul 10, 2008 (MARKET WIRE via COMTEX News Network) -- SourceForge, Inc. (NASDAQ: LNUX), the leader in community-driven media and e-commerce, today announced the release of an application for the iPhone and iPod Touch that will allow users to easily view and explore the latest news items from the SourceForge web sites. The application, called "SFNetNews," will provide content from Slashdot, SourceForge.net, and freshmeat.

"Breaking news on high-tech topics is extremely well-suited for the iPhone," said Jon Sobel, group president, SourceForge Media. "Slashdot readers, in particular, are heavy users of cutting-edge devices, and the iPhone is no exception. We're very excited to provide them with a superior mobile browsing experience."

The application will be available free of charge on the Apple App Store.

About SourceForge, Inc.

SourceForge's media and e-commerce web sites connect millions of influential technology professionals and enthusiasts each day. Combining user-developed content, online marketplaces and e-commerce, SourceForge is the global technology community's nexus for information exchange, goods for geeks, and open source software distribution and services. SourceForge's network of web sites serves 32 million unique visitors each month* and includes: SourceForge.net, Slashdot.org, ThinkGeek.com, Linux.com, freshmeat.net, ITManagersJournal and NewsForge.com. For more information or to view the media kit online, visit www.sourceforge.com. (*Source: Google Analytics and Omniture, April 2008.)

SourceForge, SourceForge.net, Slashdot, freshmeat, and ThinkGeek are registered trademarks of SourceForge, Inc. in the United States and other countries. All other trademarks or product names are property of their respective owners.

Source: http://ir.corp.sourceforge.com/phoenix.zhtml?c=82629&p=irol-newsArticle&ID=1173902&highlight= 

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#3) On June 12, 2010 at 2:33 PM, gnulaw (51.59) wrote:

>> 10. With all due respect Matt Sweeney was effectively unemployed when hired (and worse?) (incl comments 1-5). 

 

Falling Revenues Sends Ziff-Davis into Bankruptcy Source: March 7, 2008  http://www.geek.com/articles/law/falling-revenue-sends-ziff-davis-media-into-bankruptcy-2008037/ 

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#4) On June 14, 2010 at 12:33 PM, gnulaw (51.59) wrote:

20.  Volume has tanked due to continuing patterns of Street hostile stance exacerbating Geeknet (LNUX) beta volatility specifically, and risk in the capital markets (e.g. G33K IPO), in general. This is simply unacceptable and, again, simply confirms what non-insider shareholders are dealing with.

 

Date Open High Low Close Volume Adj Close*

Jun 11, 2010 1.36 1.36 1.33 1.36 22,700 1.36

Jun 10, 2010 1.39 1.39 1.36 1.36 36,300 1.36

Jun 9, 2010   1.38 1.39 1.36 1.36 12,800 1.36

Jun 8, 2010   1.39 1.40 1.36 1.39 27,900 1.39

Jun 7, 2010   1.40 1.42 1.37 1.41 40,300 1.41

Jun 4, 2010   1.36 1.40 1.36 1.37 28,800 1.37

Jun 3, 2010   1.37 1.40 1.37 1.40  3,000 1.40

Jun 2, 2010   1.41 1.41 1.36 1.37 24,200 1.37

Jun 1, 2010   1.40 1.44 1.36 1.41 21,800 1.41

May 28, 2010 1.36 1.44 1.36 1.44 14,900 1.44

May 27, 2010 1.37 1.45 1.34 1.39  5,600 1.39

 

* Close price adjusted for dividends and splits. 

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#5) On June 16, 2010 at 9:43 PM, gnulaw (51.59) wrote:

21. Geeknet (LNUX) fails to disclose their Chief Product Officer and founder of ohloh left the company today...this news was literally breaking news from this site. Is all the non-insider shareholders left with is slashdot and Scott Kauffman ?

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#6) On June 19, 2010 at 1:33 PM, gnulaw (51.59) wrote:

>>3. Alleged suspicious patterns of insider trading by Geeknet insiders viz-a-viz Sarbanes-Oxley, SEC Rule 10b-5. And here SourceForge (LNUX) CFO Continues Dumping Position, Group Media President Joins on Eve of Announcing Q2 CC (ref/ posted 6/12/2010).

 

Update (June 16, 2010): Geeknet (LNUX) Insiders dumping shares ahead of q2 numbers ending June 30, 2010.

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#7) On June 28, 2010 at 7:33 PM, gnulaw (51.59) wrote:

>>21. Geeknet (LNUX) fails to disclose their Chief Product Officer and founder of ohloh left the company today...this news was literally breaking news from this site. Is all the non-insider shareholders left with is slashdot and Scott Kauffman ?

 

[Update1] AS A MATTER OF RECORD Geeknet (LNUX) still fails to fully disclose the material fact its Chief Product Officer and founder of ohloh left the company.

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#8) On June 30, 2010 at 6:32 PM, gnulaw (51.59) wrote:

22. Geeknet (LNUX) Completes Fiscal Q2 Ending June 30 2010...Unique visitors decrease 4.8% from 45.7M to 43.5M May 2010 to June 2010.

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#9) On July 24, 2010 at 6:25 AM, gnulaw (51.59) wrote:

>>21. Geeknet (LNUX) fails to disclose their Chief Product Officer and founder of ohloh left the company today...this news was literally breaking news from this site. Is all the non-insider shareholders left with is slashdot and Scott Kauffman ? 

 

[Update1] (July 22, 2010)  Source: Third Senior Officer or Director in less than 60 days leaves Geeknet (LNUX).

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