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Is Mandriva still in financial danger?

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Guest Extreme Coder

I very recently tried Mandriva, and I'm in love with it :woops: It's going to be my main distro(after sticking with Ubuntu for a while, Kubuntu plain sucks)

Anyway,

I read every now and then that Mandriva is heading towards bankruptcy,these articles maybe a bit old, but are they still true?

Is the future of Mandriva dangered?

 

Thanks,

Extreme Coder

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Mandriva filed for bankruptcy in 2003 and hasn't quite "come out of it", as they still have some debts left to pay off, but there is a pretty recent posting here describing their current situation and some cash raising that has recently happened. There is also a thread here in which Mandriva's financial situation is discussed. One of the things that is stated regarding the cash raising effort is that they will repay their remaining debt and finally get out of Chapter 11 (bankruptcy) much sooner than originally planned.

 

Welcome to the board :)

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Unfortunately that article paints a pleasant view of a rather dire situation. The writers simple explanation of the valuation does not inspire me with confidence, nor does the fact that they are relying mainly on venture capital. VC typically requires a high rate of return, and in this situation looks to further worsen the gurrent gearing, While the VC will improve the liquidity situation in the short term, it is yet to be seen if the company can maintain it in the long term, which means raising enough profits to cover their cost of finance, and pay their creditors. The point being, that securing the money is one thing, using it well is another.

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Many successful companies use VC when they are in need of finances. The issues you raise are true in any such situation, not just Mandriva's - and of course they'll paint a good picture in their own blogs, it's a type of marketing ;)

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Many successful companies use VC when they are in need of finances. The issues you raise are true in any such situation, not just Mandriva's - and of course they'll paint a good picture in their own blogs, it's a type of marketing ;)

True however I also share reiver fluffi's sentiments...

It seems to me that mandriva got itself into a mess by going with what it felt was necassary to float on the markets... or in other words there is a mentality that say's it doesn't matter what your company are selling you make it this way and sell it this way...

I'm not entirely certain that you can compare a distro with bars of soap or packets of tissues... largely because its not a fixed product but one that evolves constantly.

Sure soap advances .. but not at the same rate... Any distro but especially a commercial one is expected to change and provide new functionality over a short cycle...

 

I once attended a business lecture thingy where the founder of Yo Sushi gave a speech...

He said there are two types of sucessful company... and illustrated this with examples...

Basicially premium companies... like "Luxury Air" ... people will pay more for quality so long as its consistent... turnover is lower but profitability higher.

Budget companies like "budget air", no thills etcv. can be sucessful too.

 

What he did say is very few companies can do both... It is possible .. it just usually doesn't work and when it does it usually involves a name divorce..

This is especially true in the US market.and increasingly in the UK one.. take Lexus or Accura... most people buying a Lexus don't want a Toyota sticker in the back window... even though they know deep down its the same company...

 

Mandriva is competing against its own FREE product and every other distro... they cripple the free one for drivers and stuff..nothing you can't do yourself but then anyone can also bore out an engine and remove a limiter... (in theory)... stuff some nice seats and stick on some fake walnut...

At the same time the FREE versionis competing against distro's which are free as in beer but also as in speech... that include 3rd party drivers and firmware etc. or at least are not differentiating on it...

 

So back to VC's... I'm just not sure the way mandriva works is suitable for a quick buck payback... and its certainly not suitable for a high risk/reward outlier (like investing in gold mines in Zambai)...

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Many successful companies use VC when they are in need of finances.

 

To fund specific investment opportunities yes, not to pull a badly managed company out of a rut. If they can't manage their debt as it is, bringing more with a higher cost isn't going to solve the problem.

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If they can't manage their debt as it is, bringing more with a higher cost isn't going to solve the problem.
It seems like they've managed their debt fairly well since declaring bankruptcy. They haven't gone under, they apparently have been paying off the debt (otherwise they'd be in deeper schhhhtuff) without too much trouble. What I see them doing here is getting themselves out of brankruptcy sooner so that they can get their company into a better position. Being under Chapter 11 is very hard on a company and can restrict their ability to actually get things done.

 

All I see here is a company getting funds to get themselves into a better position to be able to make more money than they were, and to have less restrictions on what their business can do. I see nothing wrong with that, in fact I bet you this isn't the first company to do so.

 

What I find interesting is that here on a Mandriva board everyone always seems ready to predict it's demise and ridicule them for their decisions. I mostly find it funny because as far as I know, none of us are running our own business that's internationally known - but somehow we know better? :unsure:

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I mostly find it funny because as far as I know, none of us are running our own business that's internationally known - but somehow we know better? :unsure:

 

I produce financial and management accounts for business, it's what I do for a living, it doesn't matter the scale, or how many borders they cross, they are all the same...

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Venture capitalists take on risky investments, yes, but not stupid investments. They do their homework and take calculated risks based on facts and reasonable expectations.

 

I'd be a lot more worried if they couldn't get financing at all.

 

To fund specific investment opportunities yes, not to pull a badly managed company out of a rut.

 

To an investor that's just another type of investment opportunity. If a company actually has a sound plan to turn itself around, investors are all over it.

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I produce financial and management accounts for business, it's what I do for a living, it doesn't matter the scale, or how many borders they cross, they are all the same...
I obviously wasn't aware of your job ;)

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Venture capitalists take on risky investments, yes, but not stupid investments. They do their homework and take calculated risks based on facts and reasonable expectations.

 

I am well aware of the types of investments VC's go for, I am also well aware that people have varying attitudes to risk, what looks like a "stupid" risk to one, may not to another, even if both are risk lovers. Given that they are valuing the company on open market value (at least that's how Mandriva explains it), and not future revenues/cash flows, i'm not inspired with confidence.

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