Wall Street votes for Linux in Red Hat IPO
Stock triples against market trends
Updated Red Hat beat the blues with its IPO yesterday, with its stock price tripling, despite clear evidence in the past few days that investors are becoming more sceptical about technical and Internet-related stocks. The Linux outfit raised $84 million on six million shares, after a last minute increase in its pricing from $10-12 to $12-14. With hindsight this move was amply justified. Red Hat ended the day valued at $3.48 billion. Not bad for a company that had sales of just $2.8 million in the quarter to 31 May -- during which period it lost $2.1 million. The shares ended the day at $52 1/16 -- an increase of 272 per cent. Red Hat CEO Robert Young and CTO Marc Ewing, each owning 9.1 million shares, are now worth $470 million on paper apiece. Clearly, although the Internet IPO phenomenon might be starting to burn out, the Linux factor is able to counteract this decreasing enthusiasm, and that's good news for the stack of Linux outfits waiting to IPO. Wall Street does seem to have decided to vote for Linux, so even if the Web bubble is finally starting to burst, the Linux industry should be well positioned to raise cash from investors for the immediate future. ®
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