Use access key #2 to skip to page content.

gnulaw (52.75)

[UPDATE4] The Top 15 Questions Analysts Should Be Asking Geeknet (LNUX) CEO Kauffman on the Feb 11 Q4 Conference Call

Recs

1

February 08, 2010 – Comments (12) | RELATED TICKERS: GKNT , BBY , AMZN

#15. In SourceForge's (nka Geeknet) 10K filed for Fiscal year ended July 31, 2008 under Item 2. Properties it is stated that Dexter, Michigan is "...the Research and Development center for Online Media..." and in the footnote  it is further stated "...(1) In September 2008 we entered into a 2 year lease agreement for a new 4,300 square feet facility in Dexter, Michigan...".  This is where the founders of Slashdot are domiciled, Jeff "Hemos" Bates and Rob "Cmdrtaco" Malda. (See above re: Slashdot and here). Jeff Bates is also Vice President, Product for Geeknet. Jeff Bates and Rob Malda also own Everything2.com. According to WHOIS the registrant for everything2.com is Blockstackers of Dexter, Michigan (8122 Main Street). The administrative contact is Rob Malda, xxxxxxx@cmdrtaco.net. Everything2.com appears as yet another competitor to Slashdot.org, in addition, to requiring time of Slashdot principal's. According to the Asset Purchase Agreement Andover* (acquired by VA Linux nka Geeknet) acquired Blockstackers assets.

Note: Dave Brondsema, another Dexter, Michigan Geeknet employee, previously highlighted here, also is/was engaged in another project outside Geeknet.

Q:  Whose R&D do the Dexter, Michigan offices actually represent? Is this office actually a breeding ground for launching geeknet competition? Is this a conflict of interest and or alleged further consistent patterns of alleged violations of Section 406 of the Sarbanes-Oxley Act of 2002 and SEC Rule 10b-5 or ? And why is R&D for Geeknet Online Media in a barn in Dexter, Michigan (population 2,338 - 2000 census) and not at Geeknet's Mountain View, Silicon Valley Headquarters? Dexter looks nice but where one would retire...Could this be why Slashdot was digged by Digg.com and the answer to Question #13, above?

 

#14. Geeknet's statement in its most recent press release announcing its pending Q4 Conference Call:

"...ABOUT GEEKNET

Geeknet, Inc. (NASDAQ: LNUX), is the online network for the global geek community. Our sites include SourceForge, Slashdot, ThinkGeek, Ohloh and freshmeat. We serve an audience of more than 40 million users* each month and provide the tech obsessed with content, culture, connections, commerce, and all the things that geeks crave. Want to learn more? Check out geek.net.

(*October 2009 Unique Visitors 42M. Source: Google Analytics and Omniture)...."

is using stats from October 2009 pursuant to said January 25, 2010 Press Release for its unique visits.


Q: What are current stats...from Nov 2009, Dec 2009, Jan 2010?

 

#13. What happened to Slashdot? Geeknet (LNUX) has not created/evolved any of its existing assets or new assets as competitive Web 2.0 entities viz-a-viz digg.com, twitter, facebook, et al. This is simply symptomatic of the wrong management team and Board of Directors. 


"...The Slashdot Effect - I recall times when my articles got slashdotted (a verb contributed to the English language like Googled). You would see several hundred thousand hits. Now one is lucky to see a few thousand. Either the Linux readers have been overwhelmed by the Microsoft web site killers or the articles just don't interest the Free Software Crowd.

You should look at the comparison of Slashdot to Digg. You can find an Alexa chart comparing the two sites at this hyperlink. Notice how Digg came out of nowhere to challenge Slashdot. Digg is rated the 439th most trafficed web site on the Internet. Slashdot is ranked 265..." - (March 12, 2006)*

Note: Digg.com's traffic ranking on 2/5 was 70. Slashdot's was 1,135. - (February 5, 2010).

Is Slashdot the future of media?  Slashdot fumbles...digg.com, web 2.0 recovers...Arguably the greatest story never told...What happened? Who was asleep at the wheel? The future was literally stolen from slashdot by the present...by smarter, more passionate futurists/technologists as it was being hailed as the future of media...

#12. What happened to fossfor.us? Kauffman was all giddy when disclosing this secret weapon at the 6 months ending June 30, 2009 conference call.


Note: Given SourceForge has now publicly disclosed ohloh.net (this acquisition was supposed to be announced in "early June" but has not) and fossfor.us (never formally publicly disclosed) on its newly designed website today, Sunday,  June 28, 2009 one can assume they will be issuing a press release Monday June 29th...another smoking gun(s)... Source: (June 26, 2009)  Comment #4


#11. 
Ohloh.net. How has ohloh.net contributed to: Geek.net's contribution margins?, ROE?, revenue growth?, sourceforge.net's competitive strategy? and competitive advantage?, brand equity?

#10. Why isn't this press release posted on the Geek.net website?

Note: As of February 3rd Geeknet posted this announcement and also here as of February 2nd (Note: since this Blog was originally posted  2/2).


#9. Why hasn't Geeknet made [any] announcements indicating any progress?


#8. Why isn't Geeknet engaging Analyst and Investor Conferences as a minimum baseline shareholder value maximization strategy?


#7. Kauffman is all about Advertising and Branding yet has not issued one press released during his entire tenure at Geeknet supportive of maximizing Geeknet Brand Equity specifically and LNUX shareholder value, in general. This is very bizarre, counter-intuitive, and a substantive smoking gun. See LNUX Headlines History. Why is Kauffman, with the Board of Directors support, running Geeknet as a privately-held company?


#6. What is Geeknet Board Director ... Suzanne Present up to?


#5. Why does Geeknet maintain the LNUX stock symbol when it gave away Linux.com and rebranded itself as Geeknet? (Nasdaq:G33K) seems painfully obvious?


#4. Why hasn't Geeknet IPO'd ThinkGeek?


#3. In a move suggesting Geeknet is rearranging deck chairs on the Titanic, why was Jay Seirmarco rebranded from LNUX General Counsel to Chief Technology Officer?

#2. Accordingly, why is Geeknet engaging in a blatant shareholder hostile and shareholder value challenged campaign? Is this symptomatic of a failed management and Board of Directors ? gross negligence ? consistent patterns of alleged violations of Section 406 of the Sarbanes-Oxley Act of 2002 and SEC Rule 10b-5?  

 

...and the #1 question Analysts should be asking Geeknet (LNUX) CEO, Scott Kauffman... 


#1. What are your specific short, intermediate, and long-term plans to mitigate allegations that Geeknet is the poster child for the last decade as "The face of sustained shareholder value destruction" viz-a-viz MoM and YoY ROE, ROE > Sustainable Growth (G*), Earnings and Sales Growth...


References:

 

*(February 10, 2006) Is Slashdot the future of media? Source: Fortune Magazine


(September 25, 2008) Breaking News...13D Shareholder Appointed to Board [but] SourceForge (LNUX) Fails to Disclose this Fact 

(December 24, 2009) Geeknet (LNUX) In Perspective: Is Geeknet nothing more than a Refuge for the Unemployable? Shareholder Value Hostile and Challenged Company Continues to Close Below Liquidation Value.


(November 21, 2009) Geeknet (LNUX) - What did Tesla's Jonathan Sobel Know and When Did he Know it? Should Tesla's Imminent IPO be Accordingly Delayed Pending FINRA/SEC investigation?

(October 28, 2009) SourceForge (LNUX) Website Promoting Jon Sobel as Current Group President Media as Shares Continue to Slide below 50-100-200 MA


(August 23, 2009) Follow the Money:Gladwyne/Sams (Present/Sileck) SourceForge (LNUX) Control Exceeds 22%* (shares) 28% (Board)

(August 1, 2009) Scott Kauffman "SourceForge's (LNUX) Three Guiding Principles: Speak Openly, Take Risks, and Don't Look Back" #4 - Don't Provide Guidance

(July 15, 2009) SEC RULE 10b5-1, SourceForge (LNUX)'s Morris (CFO)s July 1 SELL, and [delayed?] Q2 Ending June 30 Announcement

(July 10, 2009) SourceForge (LNUX) CFO Continues Dumping Position, Group Media President Joins on Eve of Announcing Q2 CC

(May 15, 2008) CBS Eyes C|NET for $1.8B, LNUX In Its Sites?

(November 23, 2008) Are There Two [CBS] Trojan Horses Inside SourceForge (NASDAQ:LNUX)?

Three Trojan Horses?** : Has Scott Kauffman Discovered the Combination to Unlocking SourceForge (NASDAQ:LNUX) Shareholder Value?

** Sobel, Present, Sileck. Combination numbers 2, 3 and 6.


(July 23, 2008) Is SourceForge (NASDAQ:LNUX) About to be Taken Private?

(February 3, 2000) VA Linux (nka Geeknet) to Acquire Andover.net  

(June 29, 1999) Andover.net Acquires Slashdot.

 

12 Comments – Post Your Own

#1) On February 09, 2010 at 3:20 PM, tacind (< 20) wrote:

    Your offbase posts are doing more to destroy shareholder value than anything the management has done, to the contrary, sourceforge.net is much cleaner, simpler to use, and is now displaying targeted ads from Google and Microsoft. Their traffic numbers are much higher YOY espically in the 4th quarter of 2009.

If they were going to try to take the company private the Insiders would not have bought the shares until after the company was delisted. The price has tanked because several institutional investors dumped their shares to raise cash in the great credit squeeze of 08-09.

 About the only thing I agree with in your multiple posts is the fact that this stock could be a ten bagger, with that I agree. If you want to ask some questions of the CEO call in and do so.

The only question I would ask the CEO is when are they going to institute a java/flash download manager on sourceforge.net so they can show multiple ads when people are downloading software the way adobe does on their reader downloads. It would allow them to offer additional dowloads that would generate residual income for the company. 

Custom browsers, tool bars, desktop search products and the like would certainly give a huge bump to their media revenue. Report this comment
#2) On February 10, 2010 at 6:23 PM, gnulaw (52.75) wrote:

>>#11. Ohloh.net. How has ohloh.net contributed to: Geek.net's contribution margins?, ROE?, revenue growth?, sourceforge.net's competitive strategy? and competitive advantage?, brand equity?

 

To Question #11 I would add What is Geeknet doing to keep SourceForge.net competitive vis-a-vis Google Code, GitHub, Microsoft's Codeplex, et al? 

Report this comment
#3) On February 11, 2010 at 12:38 AM, tacind (< 20) wrote:

How has Ohloh.net contributed to LNUX's growth strategy? Ohloh.net does nearly the same identical thing that sourceforge.net does, buying a top 8000 website for 2.5 million is a no brainer from a traffic stand point.

Geek.net is the epicenter for open source software easily beating its nearest rivals codeplex.com(Microsoft) and code.google.com (Google). Yes Github from a traffic standpoint looks to be closing the gap but the traffic is in my opinion artifical from a few big players trying to enter the open source community, look at the number of link ins on Alexa and then compare to Sourceforge.net links, NOT even close. Where is the traffic coming from for github? They are linked to by some big boys so they show up high in searches for unrelated strings, look at their search strings (windows,fat free,clearance,jewelers) Not anywhere in the top 30 is the words open source. I will start believing they are serious competition to sourceforge.net when they start posting download stats, active projects and the like, until then they are still a wannabe with fluff traffic. The biggest tell for me is the fact that most of their traffic is from the "work place" not from university's where most open source code comes from.

Report this comment
#4) On February 12, 2010 at 9:20 AM, gnulaw (52.75) wrote:

Kauffman, Morris or their 2/11 press releases addressed Questions 14, 13, 12, 11, 9, 8, and 7 above. I am going to give him the benefit of the doubt with the other questions [for now] given he has delivered an earnings surprise .03 v <.02>, impressive ThinkGeek growth (42% q4 09 v q4 08). Kauffman has made substantial changes incl to employee skill mix, website upgrades, and integrating all assets into an integrated whole where all resources are working together pursuing a singular passion. His decision to "...boost investment in engineering to drive innovation..." and his comment that his key focus is "invest to grow" are a key mindset and one's that are proven drivers to long-term earnings growth in technology companies. I still feel the acquisition of the ohloh team of five will prove to be a key driver in establishing Geeknet's Open Source properties (SourceForge.net, ohloh.net, slashdot.org, and freshmeat.net) into a potentially formidable Open Source ecosystem.  

I actually appreciated Kauffman's reply that it is an issue of time allocation regarding his pursuing The Street (Question #8). He advised that when he is ready he will. I buy that [for now] given what he has delivered, and what he said on the CC. 

Again, I am cautiously optimistic about what Kauffman delivered and he deserves this respect pursuant to his Q4 numbers. 

 

Other key points:

 

* ThinkGeek's gross margins up to 27% from 24% same period last year.

* ThinkGeek orders grew by 43%.

* Geeknet ended 2009 with $39.4M cash & equivalents

* ThinkGeek had 12 custom products in 2009. The top 30 accounted for 25% of ThinkGeek revenues.  

Report this comment
#5) On February 12, 2010 at 10:17 AM, gnulaw (52.75) wrote:

>>#14. Geeknet's statement in its most recent press release announcing its pending Q4 Conference Call:

"...ABOUT GEEKNET

Geeknet, Inc. (NASDAQ: LNUX), is the online network for the global geek community. Our sites include SourceForge, Slashdot, ThinkGeek, Ohloh and freshmeat. We serve an audience of more than 40 million users* each month and provide the tech obsessed with content, culture, connections, commerce, and all the things that geeks crave. Want to learn more? Check out geek.net.

(*October 2009 Unique Visitors 42M. Source: Google Analytics and Omniture)...."

is using stats from October 2009 pursuant to said January 25, 2010 Press Release for its unique visits.


>>Q: What are current stats...from Nov 2009, Dec 2009, Jan 2010?


Update: From Geeknet's press release(s) yesterday (2/11/2010): 

"...About Geeknet, Inc.

Geeknet is the online network for the global geek community. Our sites include: SourceForge, Slashdot, ThinkGeek, Ohloh and freshmeat. We serve an audience of more than 40 million users* each month and provide the tech-obsessed with content, culture, connections, commerce, and all the things that geeks crave. Want to learn more? Check out geek.net.

*(Source: Google Analytics and Omniture December 2009) . [emphasis added].

No growth?

I'm just sayin.

Report this comment
#6) On February 12, 2010 at 11:05 AM, gnulaw (52.75) wrote:

Analysts on yesterday's CC:

 

1. Robert Coolbrith ThinkEquity Partners

2. Analyst Richard Fetyko Merriman Curhan Ford

3. Analyst Mark Moore Viewtrade Securities (New)

4. Analyst Ralph Well Well Investment Management (New)

5. Analyst Jon Hickman MDB Capital Group

6. Analyst Douglas Whitman Whitman Capital

7. Analyst James Molitis Molitis Partners (New)

 

Source: Thomson StreetEvents.com.

 

Note: Q3 conference call the only attendee was Robert Coolbrith, ThinkEquity

Report this comment
#7) On February 12, 2010 at 11:14 AM, gnulaw (52.75) wrote:

26:07 into 2/11 Conference Call John Hickman, MDB Capital Group asked whether they were providing guidance for Q1 2010.

 

[Kauffman]:  No

Report this comment
#8) On February 12, 2010 at 12:05 PM, gnulaw (52.75) wrote:

>>#15. In SourceForge's (nka Geeknet) 10K filed for Fiscal year ended July 31, 2008 under Item 2. Properties it is stated that Dexter, Michigan is "...the Research and Development center for Online Media..." and in the footnote  it is further stated "...(1) In September 2008 we entered into a 2 year lease agreement for a new 4,300 square feet facility in Dexter, Michigan...".  This is where the founders of Slashdot are domiciled, Jeff "Hemos" Bates and Rob "Cmdrtaco" Malda. (See above re: Slashdot and here). Jeff Bates is also Vice President, Product for Geeknet. Jeff Bates and Rob Malda also own Everything2.com. According to WHOIS the registrant for everything2.com is Blockstackers of Dexter, Michigan (8122 Main Street). The administrative contact is Rob Malda, xxxxxxx@cmdrtaco.net. Everything2.com appears as yet another competitor to Slashdot.org, in addition, to requiring time of Slashdot principal's. According to the Asset Purchase Agreement Andover* (acquired by VA Linux nka Geeknet) acquired Blockstackers assets.

Note: Dave Brondsema, another Dexter, Michigan Geeknet employee, previously highlighted here, also is/was engaged in another project outside Geeknet.

Q:  Whose R&D do the Dexter, Michigan offices actually represent? Is this office actually a breeding ground for launching geeknet competition? Is this a conflict of interest and or alleged further consistent patterns of alleged violations of Section 406 of the Sarbanes-Oxley Act of 2002 and SEC Rule 10b-5 or ? And why is R&D for Geeknet Online Media in a barn in Dexter, Michigan (population 2,338 - 2000 census) and not at Geeknet's Mountain View, Silicon Valley Headquarters? Dexter looks nice but where one would retire...Could this be why Slashdot was digged by Digg.com and the answer to Question #13, above?

 

UPDATE: (February 12, 2010)  Do Startups Fare Better In Silicon Valley Than Anywhere Else? by Henry Blodget, Silicon Alley Insider

"...The Innovation Mecca that is Silicon Valley continues to be the startups' stronghold for a reason. It has an organic support system for entrepreneurs who can easily transition from one project to the next without the stigma of failure.

Is it possible that other startup hotspots such as New York could take the lead as the premier innovation location?

Kevin Ryan, founder of DoubleClick and Gilt Groupe, Marc Andreessen, founder of Netscape, and Facebook's Mark Zuckerberg talk about the "magnetic pull" of the Valley..." 

 

Report this comment
#9) On February 13, 2010 at 1:13 PM, gnulaw (52.75) wrote:

>>Your offbase posts are doing more to destroy shareholder value than anything the management has done.

 

tacind, I want to first thank you for your posts/contributions, especially your input on SourceForge.net and ohloh.net.

With all due respect

1. I am a Geeknet Non-insider shareholder activist who is simply the messenger and

2. The [only] entities responsible for Geeknet (LNUX) shareholder value at the end if the day are the officers and Directors of Geeknet (LNUX) and the financial results they produce and the market share they achieve pursuant to the implementation of their Corporate mission statement and Corporate Governance. Accordingly, Zack's issued a Strong Sell(1.) after Geeknet's Q3 numbers, ResearchTeam maintains a "REDUCE" rating, TheStreet.com has issued a "SELL" as of November 9th which it still maintains as of today.  

1. http://www.zacks.com/stock/news/27138/Zacks+%235+Rank+Additions+for+Wednesday++-+Zacks+Tale+of+the+Tape 

 

Again, I appreciate your posts as will any existing and prospective Geeknet (LNUX) shareholder(s).  

Report this comment
#10) On February 26, 2010 at 10:22 AM, gnulaw (52.75) wrote:

>>#13. What happened to Slashdot? Geeknet (LNUX) has not created/evolved any of its existing assets or new assets as competitive Web 2.0 entities viz-a-viz digg.com, twitter, facebook, et al. 

[UPDATE] Has Digg Found the Winning Formula for Ads?

Slashdot nemesis Digg took a big risk when it added in-line advertisements that users could digg or bury... 

Report this comment
#11) On February 26, 2010 at 10:30 AM, gnulaw (52.75) wrote:

[CORRECTION] Bad Link.

 

[UPDATE] Has Digg Found the Winning Formula for Ads? 

Report this comment
#12) On March 24, 2010 at 6:31 PM, gnulaw (52.75) wrote:

>>#14. Geeknet's statement in its most recent press release announcing its pending Q4 Conference Call:

"...ABOUT GEEKNET

Geeknet, Inc. (NASDAQ: LNUX), is the online network for the global geek community. Our sites include SourceForge, Slashdot, ThinkGeek, Ohloh and freshmeat. We serve an audience of more than 40 million users* each month and provide the tech obsessed with content, culture, connections, commerce, and all the things that geeks crave. Want to learn more? Check out geek.net.

(*October 2009 Unique Visitors 42M. Source: Google Analytics and Omniture)...."

is using stats from October 2009 pursuant to said January 25, 2010 Press Release for its unique visits.

>>Q: What are current stats...from Nov 2009, Dec 2009, Jan 2010?

and now Feb 2010?...

Note: Geeknet is still (as of March 24, 2010) quoting  October 2009 Google Analytics numbers for their 40+ million unique monthly visitors (above link is for SourceForge.net numbers). Why?

 

Report this comment

Featured Broker Partners


Advertisement