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|Subsidiary of GameStop|
|Industry||Online media; retail|
|Founder||Larry Augustin & James Vera (VA Research)|
|Headquarters||Fairfax County, Virginia|
|Kathryn McCarthy (CEO)|
|Total assets||74.2 million USD (unaudited 2008-12-31)EX-99.1|
|Total equity||62.6 million USD (unaudited 2008-12-31)EX-99.1|
Geeknet, Inc. is a Fairfax County, Virginia-based company that owns the online retailer ThinkGeek. Formerly known as VA Research, VA Linux Systems, VA Software, and SourceForge, Inc., it was founded in 1993. It was formerly headquartered in Mountain View, California.
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VA Research was founded in November 1993 by Stanford graduate student Larry Augustin and James Vera. Augustin was a Stanford colleague of Jerry Yang and David Filo, the founders of Yahoo!. VA Research built and sold personal computer systems with the Linux operating system installed, as an alternative to more expensive Unix workstations available at the time. At the time they started operations, they were one of the first computer vendors to offer Linux as a pre-installed operating system. During its initial years of operation, the business was profitable and grew quickly, with over $100 million in sales and a 10-percent profit margin in 1998. It was the largest vendor of pre-installed Linux computers, having approximately 20 percent of the Linux hardware market.
In March and April 1999, VA Research purchased Enlightenment Solutions, marketing company Electric Lichen L.L.C., and VA's top competitor, Linux Hardware Solutions. That year, VA Research also won a business-plan competition for the right to operate the linux.com domain. It was rumored that Microsoft and other bidders (Compaq, Red Hat, and HP) had offered more cash for the domain, but lacked detailed plans for its use. In May 1999, VA created a Linux Labs division, hiring former linux.com domain holder and programmer Fred van Kempen, and programmers Jon "maddog" Hall, Geoff "Mandrake" Harrison, Jeremy Allison, Richard Morrell (who would later create Smoothwall as a project at VA Linux) and San "nettwerk" Mehat. In the summer of 1999 programmers Tony "fusion94" Guntharp, Uriah Welcome, Tim Perdue and Drew Streib began designing and developing SourceForge. SourceForge was released to the public at Comdex on 17 November 1999. VA began porting Linux to the new IA-64 processor architecture in earnest. Intel and Sequoia, along with Silicon Graphics and other investors, added an additional $25 million ($36 million adjusted for inflation) investment in June 1999. By then, VA planned to change its name to VA Linux Systems and conduct an initial public offering of its stock.
Initial public offering
VA Linux Systems took its stock public in an initial public offering (IPO) on 9 December 1999, under the stock symbol LNUX. The IPO offered shares at $30, but the traders held back the opening trade until the bids hit $299. The stock popped up to $320 later in the day, and closed its first day of trading at $239.25—a 698-percent return on investment. However, this high-flying success was short-lived, and within a year the stock was selling at well below the initial offer price. As of 2005[update], this was still the most successful IPO of all time. The stock price reached an intra-day peak of 54 cents on 24 July 2002. It then soared more than 1,000 percent to an intra-day high of $6.38 on 11 September 2003. As of 26 November 2006, the stock closed at $4.64.
Many authors of free software were invited to buy shares at the initial price offering as part of a "friends and family" deal.
Due to the immense difference between the IPO offering price and the opening price, VA Linux did not actually raise much capital in the offering, and the stock price sagged as investors realized that the company's revenue and profitability were not likely to justify the share price. On 3 February 2000, the company announced that it was acquiring Andover.net (which had recently conducted its own initial public offering). This acquisition gave VA Linux popular online media properties such as Slashdot, Andover News Network, Freshmeat, NewsForge (became a mirror of linux.com in 2007, mirrors geeknet.com since 2010), linux.com, ThinkGeek, and a variety of online software development resources. With this acquisition came a stable of writers such as Rob Malda, Robin Miller, Jack Bryar, Rod Amis, Jon Katz, and "CowboyNeal". Shortly after, all of Andover.net's assets were transferred to a new division of VA Linux called the Open Source Development Network (OSDN).
The acquisition was controversial within the Linux community. Bryar, in particular, wrote multiple articles suggesting that most Linux-oriented businesses were poorly thought out. He cautioned that the excitement over Linux was little more than another Internet bubble. Nonetheless, this acquisition eventually allowed the company to shift its business model from Linux-based product sales to specialty media and software development support.
VA Linux's original equipment and systems business model encountered stiff competition from other hardware vendors offering Linux as a pre-installed operating system, such as Dell. The company booked operating losses as a result. On 26 June 2001, VA Linux decided that they would leave the systems-hardware business and focus on software development. During the summer of 2001, all of the hardware-focused employees were dismissed as a result of this shift in the company's business model.
On 6 December 2001, the company formally changed its name to VA Software, recognizing that the majority of their business was now software development and specialty news and information services. However, the company's Japanese subsidiary still uses the name "VA Linux Systems Japan K.K." In January 2002, Sumitomo Corporation became the largest shareholder in VA Linux Systems Japan, and the Japanese subsidiary became independent of VA Software.
VA Software changed its name to SourceForge Inc. and merged with OSTG on 24 May 2007; eliminating OSTG as a separate entity.
On 5 January 2009, Scott Kauffman was appointed President and CEO of SourceForge, Inc.
Geeknet President and CEO Scott Kauffman resigned on 4 August 2010. He was replaced by Executive Chairman Kenneth Langone. On 10 August Jason Baird, the Company’s Chief Operations Officer, and Michael Rudolph, the Company’s Chief Marketing Officer resigned, both effective 31 August 2010. Jay Seirmarco, the Company’s Chief Technology Officer also resigned, effective 30 September 2010.
Effective 5 August 2010, Geeknet changed their NASDAQ stock symbol to GKNT.
Effective 31 Jan 2011, Geeknet appointed Matthew C. Blank, former CEO and Chairman of Showtime Networks as a member of its board of directors. Later in 2011, the company renamed its Freshmeat website to Freecode.
On May 26, 2015, it was announced that pop culture-oriented retailer Hot Topic had made an offer to acquire Geeknet for $17.50 per-share, valuing the company at $122 million. However, on May 29, 2015, it was revealed that an unspecified company had made a counter-offer of $20 per-share; Hot Topic was given until June 1, 2015 to exceed this new offer. On June 2, 2015, it was announced that video game retail chain GameStop had acquired Geeknet for $140 million. The deal closed on July 17, 2015.
On 21 February 2006, VA Software reported its first profitable quarter. Net income for the second fiscal quarter of 2006 stood at $10.5 million, or 17 cents per share, compared to a net loss of $702,000, or a penny a share, in the previous year's second quarter. Excluding one time gains from the sale of Animation Factory, VA's profit that quarter would have been $1.1 million, or 2 cents per share. VA followed this performance with two more consecutive profitable quarters, earning $1.1 million in the third quarter of 2006 and $700,000 in the fourth fiscal quarter of 2006, which ended on 31 July. VA ended the fiscal year with $51.9 million of cash, up from $36.6 million the previous year. The company remained profitable until the fourth quarter of 2007. Since then, with the exception of the fourth quarter of 2009, the company returned only money-losing quarters through May 2010.
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- Bloomberg data for LUNX US Equity retrieved on 21 May 2010
- Official website
- CNET: VA Linux files IPO plans (9 October 1999)
- Salon: Dissecting the VA Linux IPO (10 December 1999)
- CNET: VA Linux leaves hardware, lays off workers (27 June 2001)
- Wordpress: VA Software reports first profits ever. 60-percent stock rise before the report, and 40-percent rise after. (23 February 2006)
- VA Linux Systems Japan K.K.
- Aservo - Distributor of SourceForge Enterprise Edition in Europe