Red Hat Is Now Part of the S&P 500 128
phantomfive writes "Red Hat has made it onto the S&P 500, an important measure of the stock market. It is replacing CIT, which is expected to go bankrupt after the government refused to bail them out. Red Hat is the first Linux company to make it on to the S&P 500. While this means little directly for the company, it is an indication of the importance Linux is taking on in the world."
Re:Index funds (Score:4, Interesting)
Comment removed (Score:4, Interesting)
Re:Let Me Be the First To Say... (Score:3, Interesting)
Re:Index funds (Score:4, Interesting)
Owning Red Hat stock doesn't make linux happen. When you (or the index fund) buys RHAT stock, that money goes to the previous shareholder, NOT Red Hat.
That is true, but there are tangible benefits to RHAT. One of the ways they can raise capital is to issue additional shares. An increase in the stock price means that they can raise more money when they do this. This also makes the stock options that are offered to employees more valuable without costing the company a cent.
It also protects the company from a hostile takeover since any buyout becomes more expensive.
Re:Just now? (Score:2, Interesting)
How many of the companies you own stock in trade with/do business in red china (or Viet Nam for that matter)? Or put it another way, how many *don't*?
I believe by "commies" he was referring to actual communists. If there are any actual communists left in China these days, they're probably repressed by the Chinese government for advocating radical philosophies fundamentally opposed to that of the party. :p
Re:Index funds (Score:4, Interesting)
Not directly. But as more people buy stock in RHAT it means that Red Hat will be a more viable business and more people will put money into it. So indirectly Red Hat does get money.
Having a high stock price does not mean you have a viable business. Please remember the dotbomb bubble. Many businesses had completely ridiculous business plans yet their stock went through the roof. Then they ran out of money and the stock certificates were about as valuable as scratchy toilet paper.
I'm not saying this is true of RedHat, but PLEASE don't equate a high stock price with a viable business. If anything, a high stock price equates with the mere perception that the business is viable.
Lost Opportunity (Score:2, Interesting)
Back in the early days of RedHat, they used to be located in a non-descript office park in the Raleigh-Durham area. I remember working for an obscure Sales Automation company and our office was located upstairs, where if you turned to the left you'd head into our office and if you turned right you'd enter the small RedHat Software offices. I used to pop my head in occasionally to this company that was making this stuff called "Linux", and even asked for help when I was secretly setting up a Linux server at my company's office to replace our Windows NT 3.51 server.
If I had only turned right when heading into work instead of turning left when walking up those stairs, I'd today be a millionaire. :(
Re:de-spin (Score:3, Interesting)
Assuming this 2002 statement concerning the S&P Index Policy [standardandpoors.com] is still accurate, Red Hat was selected because they are a leader.
When it comes to publicly traded linux distributors you have NOVL, ORCL, RHT, and at one time Caldera which is now SCOXQ.PK. The make up of the industry has some extreme variation from Novell and Oracle who have started out and continue to sell proprietary closed source products to Caldera a.k.a. The SCO Group that is currently struggling to avoid Chapter 7 Bankruptcy liquidation. Red Hat is more than representative, they are the leader.
And in a way this is a sign of the "runaway success of linux". I've read and listened to the ignorant mewling of several "investment advisers" over the years continually predicting the demise of Red Hat, and open source in general, because they "give their product away for free". And yet here we are not only with Red Hat continually growing and profiting but at the same time linux has become a huge part of the server infrastructure that makes up the internet and global business data centers but it has also taken a minor share of the desktop market and a massive share of the embedded market in products from data infrastructure components like routers and firewalls to mass consumer products like televisions, DVD players, HD satellite receivers, etc. It is due to this runaway success that Red Hat has grown, profited and now has been acknowledged as a leader with inclusion in the S&P 500.