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."
Benefit of being in S&P 500 (Score:5, Informative)
There is a benefit to stockholders since being in the S&P 500 creates instant demand - it means that all the S&P 500 index funds need to buy your stock!
Index funds (Score:5, Informative)
Inclusion in the S&P 500 could mean some index funds will have to acquire some shares. Inclusion in an index is usually seen as positive, and falling out of an index is seen as negative, when index funds have to sell.
de-spin (Score:5, Informative)
Red Hat has made it onto the S&P 500, an important measure of the stock market.
First, the S&P members are selected by committee, not by merit alone. Companies are (usually) included because they have a high liquidity and are "representative" of their industry. Not that Red Hat being selected isn't good news, just understand they're not selecting it because of the "runaway success of Linux", but because Red Hat is representative of the overall health of this segment of the industry.
Re:I wonder... (Score:3, Informative)
"The" S&P 500 is a list of stocks published by Standard & Poor's, a division of McGraw-Hill.
I seem to recall that NYSE does. Then again, I'm old.
NYSE, AMEX, or NASDAQ might, but "The S&P 500" can't (except in the sense of "do the companies in the S&P 500 use Linux," in which case the answer is obviously "yes, some do").
Re:de-spin (Score:5, Informative)
For Red Hat to be representative of their industry, they need to be a healthy and profitable company. While I agree that this doesn't necessarily point to Linux as a being a "runaway success", it is significant to note that Red Hat's flagship product is a distribution of Linux and the various open source tools from GNU, X.org, Gnome, X.org, etc, and that their other products that help to boost their profitable, like JBoss are also open source tools. So yeah, it's a big win for open source because it shows that you can make it to the S&P 500 by being an open source company. That puts things in proper perspective.
Re:Let Me Be the First To Say... (Score:5, Informative)
Well, after 2008, the year of the Windows.NET stock exchange [computerworld.com], I think 2009 is already the year of the Linux stock exchange [techgeist.net]. At least it's clear now that people do get fired for buying Microsoft [seattlepi.com].
Re:de-spin (Score:3, Informative)
It's like graduating from fifth grade and moving on to middle school. It might be a big deal to the kids involved, but to the rest of the world? Not exactly bragging rights.
Right. Because the vast majority of companies eventually wind up on the S&P 500 list, just like the vast majority of people move from 5th grade to middle school.
Your attempt to downplay this is ridiculous. This may not be a big deal to "the rest of the world" (exactly how many things are a big deal when put in that context?), but it's quite a big deal for open source.
Comparing this to all the things it's NOT misses the point. That's a fools errand. What it IS is a recognition that a company based on open source software is a player in the large market. That's all people are trying to say here.
Re:Let Me Be the First To Say... (Score:5, Informative)
HPQ [google.com] HP-UX [hp.com]
ORCL [google.com] Solaris [sun.com]
IBM [google.com] AIX [ibm.com]
NOVL [google.com] SUSE [novell.com]
Looks like Red Hat has plenty of competition. Red Hat's business performance selling support services for their distribution of linux has been outstanding and their inclusion in the S&P 500 is well deserved.