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WHY the tux500 promotion is a pump-and-dump scam

Date/Time Permalink: 04/18/07 06:46:22 pm
Category: General

So far, I have been focusing this series of articles on the Linux angle of things, instead of the sports angle. So today, let's take a look at our racing team. Before I do, I want to make perfectly clear that I have nothing against the driver, the driver's team and company, or the Indy 500 in general. But I will need to cite some public facts which reveal why this dream of a Tux-sponsored race car in the Indianapolis 500 is not just a long shot, not just a thin chance, but flat-out a bad investment.

To begin with, here's the career stats for the driver Stephan Gregoire:
The link shows that this career spans 1996 through 2001, a six-year lapse, and a come-back in 2006, for a total of 46 races. To start with the obvious: 0 wins.

He has also never made pole position. According to Wikipedia:

Pole position is determined on the first day of the 4 days of qualifying. 4 laps are run by each car. The average speed is what determines the positions, including pole. A time set in an earlier session always starts above a faster time set later, although the fastest 33 times always start.

...for the current way they do it at the Indianapolis 500. But, regardless of which race, grid position is always determined by prior qualifying laps or finishing position in a previous race.

Of those 46 races, he has only stayed running to the finish in 28 of them; so he only finishes 60% of the time. He's had nine accidents.

Compare the starting position to the end position. Of the remaining 28 races which he has completed, he has lost position in 5 of those. Of the remaining 23 races in which he has finished and not lost position, he only gains an average of 8 positions. In his last race in which he finished (Sun, 15 Oct 2000 - Texas Motor Speedway), he finished 20th.

I could bat around more stats, but the point that I'm making isn't whether or not he can win. Even if you don't win, arguably, you could have some screen time during which the logo on the side of your car is visible. The point that I'm making is, before you can be in a race, you have to qualify for the race! You do this in timed laps prior to the race itself.

Where is our insurance on this risky proposition? We're talking about a lot of money here: how do we get it back if he fails to make it into the race to begin with? Is it worth $350,000 for a driver who doesn't even finish almost half the time?

I say again: I bear no ill will towards Mr. Gregoire. He certainly has guts and determination, and God knows he does something for a career that I myself wouldn't do. But for this case, the stakes are too high and the odds are too small.

This exact point was discussed at this thread on LXer:
And I quote the poster identified as 'top2percent':

...I hear Marty Roth has some empty space on his Indy500 entry - and I'm sure his sidepod goes cheap. He usually spins a lot during practice - guaranteeing anyone who sponsors him some tv time. If I was donating money to an IndyCar team - I'd recommend going with him.

But I'm not so instead I'll say this:
Make the goal a thought-out and seriously-marketed web-campaign for a season-long Champ Car sponsorship with a team like Dale Coyne Racing and I'll throw in $100, and personally recruit at least 10 more of the same.

Fan sponsorship of this type plain & simple doesn't work - for a number of reasons.

Here's how it works - IndyCar's "biggest fans" (including the Camp&Brew gang - and trust me, they are HARDCORE!!) were trying to fund a similar effort and after 10 weeks of spreading the word on websites & via email - have amassed:
Total number of pledges
Total pledge
$ 6751
Average pledge
$ 92.48
And by the way, $350K gets you sponsorship of someone like Stephane Gregoire's car - he was so slow last year he was parked with "handling" issues listed as official reason for retirement after only 49 laps. Yup, that's money well spent.
A half-decent team is much more expensive than $350K.

Here is a sensible argument from somebody who knows what he is talking about. And he says between him and ten friends he's willing to drum up $1100, if only they'd follow his advice! That's one-fifth of the total donations so far at the time of this posting. Plus, he recommends a cheaper option with the empty space on a cheaper entry who also grabs some camera time.

And for the "crime" of simply stating this informed opinion, what does he get? Here comes the character assassination mafia, helios again:

Guys like top2[percent] wouldn't donate to ANY cause. They always find reasons they don't like this project or that project. They just keep on taking what they can, using Linux day in and day out without any hint of community spirit or need to give something back. He, along with many others have been offered the chance to help other advertising efforts and they stick up their noses at everything that is suggested.

Wouldn't you love to see this guy say that about you with him standing in front of you? I know I would. "Pay us money, or we'll ruin your online reputation". This is extortion! Look it up in Wikipedia (emphasis mine):

Extortion is a criminal offense, which occurs when a person either obtains money, property or services from another through coercion or intimidation...

Note that this is "intimidation", per se. No threat of bodily harm is necessary. To collect for a cause, you politely ask "I'm collecting for this cause; would you be interested in donating?" If people don't donate, you politely say "Thank you for your time." or "Sorry to trouble you." or maybe even "Here's a link to our website in case you change your mind." You do not carry out a campaign of terror across the Internet directed at everyone who did not give you money!

Note the bottom paragraph. You wouldn't want to be "someone who got in the way", would you? Why, what will happen? What exactly does "coming back to cause you grief later" mean? Concrete shoes and a short swim?

top2percent responds:

helios - you're wrong - I've donated to Hole in the Wall Gang (a Champ Car supported charity) and personally contributed to & raised approximately $3000 for medical research in charity go-kart races that I've participated in.

...and he is subsequently booed down anyway. Funny, all devnet and helios has to do is say they're doing good things (albeit with OTHER people's money) and expect to be hailed as saints. People who actually contribute something get slandered. Seeing as how I was on the sh*t-list of devent and helios for years already (for simply protesting the way they demonize users of the Linux console as 'elitists'), I'd count the fact that they don't like me as something to be damned proud about!

(from the writing I'm guessing) devnet pretending to be somebody else:
I love the response by the moderator. Yeah, when has anything constructive come out of these people?

Even if this whole scheme were practical, the method and manner in which they go about their bullying of the Linux community at large is reason enough to cry "foul". We have had enough, far more than enough. The tux500 scam is just the final straw, the Linux community's Boston tea Party.

Top2percent goes on at length about more reasons why this waste of Linux user's money is a bad idea - if you visit that link at LXer and read the rest of top2percent's comments, you will see, for the first time since the dawn of this wacky project, somebody who actually knows something about race cars!

Once again, I urge everyone reading this to bring this scam down, get their money back, and if they want to see Linux have publicity, devote their money to more practical means in the hands of somebody they can trust!

The full series on the tux500 scam:
Is the Tux500 racecar advertizing project a scam? Just asking the question...
Tux500 scam - news and links history Showing the circular links and promotion.
the tux500 scam of the Linux community A blogger cracks, more false promotion, an example of a racecar advertising scam perpetrated recently in NASCAR.
WHY the tux500 promotion is a pump-and-dump scam An in-depth analysis of driver stats, and some very serious cases of extortion, threats, slander, and intimidation on the part of the scammers.
The Final Analysis of the Tux500 Scam The source of the news story on indy500.com. A final summary.
Further Developments since I broke this story:
Dear Newsforge: I am not devnet. Newsforge links to devnet and says that's me. Best thing to happen to devnet and worst thing to happen to me. Other developments.
DC Parris of LXer to Linux community member: shut up! I wouldn't have half the problem with these thugs, if they didn't abuse EVERYBODY who crossed their path.
tux500 crew caught rigging Digg - with screenshots! Somehow, even documented proof of their own admission of blatant spamming fails to get them shut down. Wake up, Internet!
Are the tux500 people really all THAT bad? Or, why being on tux500's case 24/7 is one of the most important and necessary things I've ever done.

Give some consideration to chronological order. At the beginning, I was groping around, and chased a lot of dead ends before I honed in on the important facts.

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