posted 01-07-2000 12:02 PM         

Excerpts from an article I just read:
"On September 22 of last year, shortly after Red Hat's (Nasdaq: RHAT) spectacular first day in the market, LinuxOne filed for an initial public offering (IPO) with an S-1 statement almost word for word identical to Red Hat's. The only difference was that LinuxOne had no earnings -- literally $0.00. It had no INCOME. It had never sold a product. It had only incorporated (in Nevada, a state with no disclosure requirements) a few months earlier. The company's entire assets on the S-1 consisted of about $150,000 cash (from their president buying stock in his own company) and a little under $5,000 of equipment (mostly their Web server). This was listed in dollars, not in thousands as is customary, apparently to make it look bigger.

The president of the company, Wun C. Chiou, left his previous position as president of NetUSA (OTC: NTSA) in March to found LinuxOne. NetUSA is a penny stock traded over the counter that issues unsolicited commercial email (i.e., spam) to advertise its products.

LinuxOne's home page keeps changing (at one point having "meta" tags telling search engines to categorize it under, among other things, "sex," "girls," "nude," "food," "drinks," "shopping," "Sega," and "Play Station") but at the time of this writing it only has a logo that sends email to the company if you click on it. That's it, otherwise the page is empty, and there are no links to any other pages.

On the basis of this, LinuxOne filed to sell 3 million shares to the public at $6-$8 per share, thus cashing in on the Linux hype for at least $18 million, and hopefully way more.

Then, it announced a $500,000 deal with a company called "Power Source." Income? Not really. Power Source runs flea-market tables in California. If Power Source actually had $500,000 of cash to spend on anything, why would their e-mail address be a Hotmail account?"