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IPO values Caldera at $1.2 billion

Strong debut defies NASDAQ jitters

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Despite worries that the Linux stock boom may have run its course, yesterday's float by Caldera Systems more than doubled the price of the five million shares offered in difficult market conditions, partly resulting from the expected Fed rise in interest rates. NASDAQ dropped more than 200 points in the first hour, but Caldera trading did not begin until mid-morning, after the jitters had subsided and the NASDAQ index had recovered. Caldera's debut had been expected last week, but the NASDAQ fall evidently made the company hold back. Originally, the issue was to have been priced at $7 to $9, but this crept up to $14 by Monday afternoon when the issue was priced. The day's range was $23 to $33, and it closed up 110 per cent at $29 7/16, perhaps to the consternation of the early profit takers who sold when it was in the mid-twenties. Five million shares were offered, but the first day's trading showed a volume of more than 15 million. With more than 38 million shares outstanding, the capitalisation of Caldera went up to $1.27 billion, which is not bad for a company that had revenue of $3.05 million in 1999 (to 31 October) and net losses of $9.37 million. Caldera raised $70 million for 13 per cent of its shares. If there's a message, it is that the Linux boom is alive and well, although shares are now priced a little more realistically than in the past, perhaps reflecting greater maturity in both the market and investors. Meanwhile, Caldera will need to work to differentiate itself more in the marketplace. CEO Ransom Love made it clear yesterday that he sees his main competitor as Microsoft in the OEM space, and wants Linux to dominate as the Internet operating system of choice, he said in CNBC interview last night. ®

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