The Strange Story of Liberate Technologies

Some of you might recollect, as I do, the prior incarnation of Liberate Technologies, when it was a vendor of software for digital cable-television systems, including set-top boxes.

As this cached SEC filing attests, Liberate essentially wound up that business last  year when it sold its North American assets to Double C Technologies, LLC, a joint venture majority owned and controlled by Comcast Corporation with a minority investment by Cox Communications, Inc. That asset sale closed in April of last year, with Liberate receiving approximately $82 million in cash.

Subsequently, Liberate sold the remainder of its business assets to SeaChange International, Inc. That left Liberate with no product- or service-related business to operate on an ongoing basis. As Liberate put it in its Form 10K issued on August 15, 2005:

We will continue to operate Liberate to resolve existing liabilities, prosecute and defend pending litigation and pursue other claims as appropriate that we may have against third parties, and dispose of non-operating assets to maximize shareholder interest. Although our board of directors has not yet made any determination, we also will continue from time to time to evaluate and potentially explore all available alternatives including a dissolution and liquidation of Liberate, a share repurchase, an extraordinary dividend or other transactions to maximize stockholder value. We believe that our cash, together with the proceeds from Asset Sales, will be sufficient to meet our working capital requirements for the next twelve months. In fiscal 2006, we expect to continue to use net cash to fund our operating activities.

Apparently, Liberate Technologies has found a business it would like to enter. You’re probably thinking it’s a technology business, somewhat related to the markets and technologies in which the company had been involved previously. Well, you’d be wrong.

Instead, Liberate Technologies announced today that it has offered to pay $21 per share for medium-haul trucking company USA Truck Inc., which apparently has declined the proposal.

As a result, Liberate’s CEO, Paul Vachon, has gone to the extraordinary lengths of publishing an open letter, addressed to Jerry D. Orler, USA Truck’s president, in the guise of a press release. You have to read it to believe it. Basically, Liberate wants to take USA Truck private, and it’s willing pay a decent premium to do so.

How many other failed technology firms, literally shells of their former selves, will take this route? Are we about to witness a trucking bubble paralleling the technology bubble of a few years back?

I’m being facetious, of course, but I think it’s fascinating that a former technology company is attempting to remake itself as a acquirer of decidedly old-school companies in industries such as commercial transport.

For those of who hadn’t noticed, or who are in a persistent state of obdurate denial, this is just another data point emphatically stating that we aren’t in the late 90s anymore.

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9 responses to “The Strange Story of Liberate Technologies

  1. Sadly, I must concur. As web developer for Liberate’s Intranet, I was one of their last contractor->to->vendor status to ultimately close their Insider web doors. Why? Because it was me who had to post the very last entry, then with tears in my eyes walk by endless darkened cubes, offices and hallways on my final exit. No one was more into “obdurate denial” than I was. They were my family! And still are btw. Great teams, incredible talent, soaring spirits ultimately cut off at the knees by something I still don’t understand today… while the joy I felt walking into “work” everyday… will never ever leave me!

    Linda

  2. To Linda,
    Your words renewed a loss that never leaves
    though our worlds were worlds apart. Strangely, I went from a trucker to a School Psychologist and took part in the birth and renewal of “good practices”. Through the poison of an unwanted regionalization which no one wanted we simply got better each and almost every day. I lost my
    “team” to circumstance and have puttered since.
    Still alive with art and ideas the flame flickers and perhaps I am just around the corner from importance but our school, and our kids, and our community in which we laughed and cried for so long hangs low in the rearview with the
    spirits of yesterday and the presence of the moon illusion. Differant but the same….what I am left wondering however…is to what did you turn to bloom? Or are you stillin the shadow of yesterday? Trucking perhaps? Or perhaps like I there are too many paths to but too few teams.
    I chance to be annoying so enough said.
    Be well and smiling TheTinMan
    Ps Tomorrow never comes

    • Linda H. Peck

      Dear TinMan Dan:

      “…what I am left wondering however…is to what did you turn to bloom? Or are you still in the shadow of yesterday? ”

      Your v-e-r-y interesting perspective and guess — only means I have indeed stayed in the shadow of yesterday and instead turned to real terra firma family history. In this order of blooming…

      http://haggin.org

      http://haggin.net

      http://genealogy.haggin.net

      I really do have to smile when thinking that IF I can go back to Constantinople…I certainly could go back to Liberate in San Carlos. Our IT/IS group still remain virtual pals to this day — and for that treasure I am indeed blessed and so were you — trucker –> psychologist

      Cheers and Congratulations!
      Linda

  3. Rebecca Prall

    Dear Linda, We sure did become a family didn’t we. We worked 16 to 20 hour days to get Liberate public. Of course our hard work came with promises that were never kept. Layoffs before we vested in our IPO….lesson learned. I still work hard and will do it again if it meant meeting people like you. Lots of love…until next time….

    • Thanks for such a GREAT Surprise, Becky!!! I was SO happy to learn about your posting. Because I dearly love Our Liberate Family and do hope that someday we can just all get together. Wishful thinking, eh? As that is exactly how I feel. Great Days with Great People! Much love, Linda

  4. Linda, by chance I was hoping my post would find you! I say a Fondue Party reunion is due! I am reminded of the 1923 rd. version of my favorite poem when thinking of those times at Liberate: “Natures first green is gold; her hardest hue to hold; her early leafs a flower; but only so an hour; then leaf subsides to leaf; so edan sank to grief; so dawn goes down today; nothing gold can stay”..Lets meet and break the curse. ü beckyprall@hotmail.com.

  5. I lost a small fortune on this company. Never traded on the stock market ever again after that fiasco.

  6. Ted,

    Given what transpired at Liberate, I can understand why you lost faith.

  7. Ted: I had friends who invested in Liberate who too lost a great amount of money. Don’t let that deter you. Next time call the receptionist from the Company you are invested in or plan to invest in. If she has a good attitude and says the comany culture is good. Then you know that the company is doing good. Once the attitude of the employees change…its time to sell. I know this sounds crazy, however I know a lot of rich investors that do this. Of course you don’t just flat out ask..start a repor..In Liberates case, there were a lot of “greedy” people who came on board after our IPO . And a lot of misreporting of our P&L’s. All of us were taken by surpise.

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