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Red Hat Software Businesses

Red Hat IPO Story at Yahoo 87

Posted by CmdrTaco from the stuff-to-read dept.
malacai sent us another article in a long stream about Red Hat's Impending IPO. This one talks a bit about Be's IPO, as well as assorted other stuff related to it. It's a good piece (and one that for a change is about the actual IPO and its implications and not the E*Trade/SEC fiasco)
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Red Hat IPO Story at Yahoo More

Red Hat IPO Story at Yahoo

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  • And how much money has Amazon lost? Whether it's right or wrong, the idea that investors won't like RedHat BECAUSE they lose a lot of money, and their valuation is absurdly large is just wrong. The only reason they'd be a bad investment is if other investors don't like them. And the buzz s nothing but good.

    Also, they will in competition with companies with a very good name recognition like Dell.
    I'm writing this comment on a Dell Precision 410 workstation that came factory installed with RedHat 6.0. The above sentence is like saying that Dell competes with Microsoft (wrong again, for those keeping score at home).

    I think you must have meant to say:
    "Also, they have formed valuable corporate partnerships with companies with very good name recognition like Dell, Intel and IBM, just to name a few."

    Off this poster's comment, and on the article itself, I don't see the comparison with Be's IPO being particularly relevant. Yes, Be has good ink here on Slashdot and among the alternative-OS-enthusiasts, but it's mainstream mindshare is zero. Linux, on the other hand (and most people don't know there's Linux that isn't RedHat Linux), has buzz everywhere. This community gets way more press and word-of-mouth than a lot of people here think. The whole world is watching :-)
    ----------------------
    "This moon-cheese will make me very rich! Very rich indeed!

  • Who is "they"? I'd like to see a citation, if you have one. I've looked, and I haven't managed to find out anything definite about Be's prospects. There are plenty of generalized statements that they stink, yes, but I've seen precious few figures.

    If my memory serves, they were burning about $ 25 million a year in cash. The Be IPO gave them $ 30 million. So they have about a year to prove themselves.

    Their current strategy is to get themselves into set-top box applications. I don't think it's going to bear fruit this Christmas, but it might next. If they have something promising by about this time next year, I think they could sell additional stock and keep going.

    I'm certainly rooting for them (and using their product right now).

    D


    ----
  • Caldera and TurboLinux forked from Red Hat some time ago, although they maintain it themselves nowadays. They ARE based on older code of Red Hat however. Mandrake just straight up leeches off of Red Hat's work. Perhaps they should give Red Hat some royalties to compensate for the free development they make money off of. While not required by the GPL or anything, it would certainly be a good gesture....
  • I meant the part of the article that talks about the fact that BeOS's stock barely moved in price after the IPO, in contrast to a lot of ".com" stocks that seem to float upward of their own volition. This is Be's "experience" with the stock market, so far.
  • Man, that sucks. Yeah, the "Indicate Interest" stuff didn't work until I both had an account and had money in it. Then, it took me to a multi-step process, beginning with the "do you qualify" test and ending with a form asking me to place a conditional offer (max number of shares at what max price).

    How long after you made them aware of the glitch in your account did they fix it?

    --

  • Ummm, no. Amazon has 1.01 Billion in sales, and a profit margin of -22%. That's MINUS 22%. Here's my prediction: RHAT will show a profit way before AMZN.


    ----------------------
    "This moon-cheese will make me very rich! Very rich indeed!

  • Sure, profit runs this country, and if Redhat customers can make a bigger profit by paying basically $0 for their operating systems and getting support from redhat, redhat can be a success. That's what will drive this IPO.
  • In what way are they competing with Dell?

    I thought Dell was installing Red Hat on some of their machines!

    Obviously they're competing with Microsoft, and that's enough to worry any company. But Dell? Gasp.

    D

    ----
  • It's amazing how little research the stock-buying public tends to do. Look how many people bought shares in China.com, just because it has two buzzwords that Wall Street likes: China, and "dot com". The amount of people buying the stock was huge, even though the company information (SEC filing, i think?) wasn't very easily available. I wonder how many people bought shares in MP3.com thinking that they *owned* the MP3 format? And will those same people buy Red Hat shares thinking Red Hat owns Linux? Hey, MP3 and Linux are some pretty hot buzzwords nowadays.


    ..................................@ @
  • I think the fiasco was less serious than it seemed. I was accepted, and I'm neither highly rich nor highly experienced. And I didn't lie. :)

    --

  • My guess is that it was moderated using the classic "Randomly select a word" style of moderation, which I hear is used by an increasing number of moderators here on this most excellent Slashdot.
  • excellent idea.

    the comments usually DO contain more intellegent writing than the online news links. some sort of section containing high-moderated comments/topics would be nice. i cannot think of how to do it. but there are many a thread that dies simply because it is no longer on Slashdot's front page. i ASSUME that it is dead at least and never return. there are a lot of great conversations that i would go back and read if i knew people were posting.

    just a thought.

    -fixe

    thanks for the knowledge slashdot.
  • an Initial Public Offering. When a stock is introduced to the Stock Market, and becomes publicly owned (at least partially) as opposed to privately owned..


    ..................................@ @
  • Caldera is absolutly not based on Redhat. Mandrake is. Not sure about TurboLinux.
  • Can someone please confirm when RedHat is going public? I was under the impression that it was today (Monday August 9th), however this article mentions that it is in fact Wednesday the 11th? I checked RedHat's website, but couldn't find any information besides the old June press release. Can someone please help so I don't miss this one?

    Thanks
  • Like Business Week, Newsweek (oh, you mean you missed the article), TIME (ditto), and so on.

    It's not my fault that you just read the JFK Jr. pages and toss the mags.

    ;-)

  • Wednesday the 11th.

    Pricing before the 10th, allocation on the 10th based on account valuation.

    If the money isn't in your account to cover at least 100 shares, you're out of luck.

  • Everyone I have talked with had good things to say about both the tech support people and the direct line IPO (you know, the 1-888 number in "the letter") people. They were pretty helpful and polite. Kudos to them.

    Now the people who answer the main E*Trade 1-800 number could use a little coaching from them, on the other hand.

  • That's probably true, but this thread was talking about the market value (market capitalization) of the company, and that is a simple quantity defined as:

    (Shares Outstanding) * (Share Price) = Market Cap

    Which on 11 August is now:

    66.8 Million Shares * $52.0625/Share = $3.48 Billion!

  • Nothing of note there; but then again it's from ZDNet. It is unfortunate for poor ol' Be, though.
  • An IPO article without news about the fiasco? That definately lacks spice.

  • Disclaimer: I'm not the person who moderated it down. I currently have no moderation points, anyway.

    To me, his post *does* look like a standard first post. Not redundant, but offtopic; for starters, it was on Yahoo news, not ZDNet, and didn't really say anything, but was just the usual "Oh, the media is crappy" and obviously didn't read the article. Well, not obviously, but most likely didn't. If I had moderated it, though, I'd have done 'off-topic.'

    That's just me, though.


    ---
    "'Is not a quine' is not a quine" is a quine.
  • someone moderate this back up. I don't think it needs to be moderated down...

    Are we just killing *all* first posts now?
    "Subtle mind control? Why do all these HTML buttons say 'Submit' ?"
    1. Buy a token amount of shares in Red Hat (and keep them)
    2. Inform the Board of Directors that as a shareholder, you would like to see them mention other distributions in press releases, etc.

    BTW, you are aware that other distros are/were based on Red Hat (TurboLinux, Caldera and Mandrake come to mind)

  • well, I wouldn't have moderated it off-topic. yes, they were wrong, since it was on yahoo, but the article didn't say much to me, and i read the whole thing. it was just another boring, sterile, commentary on the situation and the most interesting thing about it was the reference to poor ol' BeOs...
  • ...I mean wEIrd and ZDnet and all those other ones that make out the bulk of articles on /.
    I spend a couple hours a day reading stuff here, but sometimes it seems like /.ers are preaching to the choir. We rant and rave and get all hyped, but rarely, rarely, rarely does my father's copy of Newsweek mention Linux. Haven't seen BE in it. Maybe because Microsoft and Apple and HP pour buttloads into fullpage and multipage glossie ads in the mags. I was ticked when a week or so ago there was steve jobs in the middle of Newsweek plugging his ibook, and somehow it was news instead of marketing. (imagine a 3 page story, in Newsweek, Time, or USNews on say, one of Compaq's notebooks, or even better, something from VA. We'd say, gee, a computer. woopee doo. Apple, specifically Steve Jobs, has always been a media favorite IMHO.)

    It all comes back to mindshare (not any company by that name but the socio-psychological idea). HP sells "The Unstoppable NT" and we groan. We all know that the world just isn't right and that we have the solutions (whatever they may be). So we shout at eachother across the internet, sometimes flaming, sometimes being polite and careful. But we are a fringe. Broad and varied and multinational but still a fringe.

    I like it. I come back here every day. I can almost always find something interesting to read. I enjoy and learn from many of the comments. I'd like it if there were some other things to do here (maybe a more newbie-friendly ask /., where I could post "is BE really as good as Be INc. says it is?" or "I had to give up linux because Netscape 4.0x really sucks, is it worth my time to dl 4.6?" without feeling like i was off topic or not important enough to waste a whole story. I also think certain threads could just be ongoing if there was a bit more structure to moderation. (for example: Perhaps old but really good comments could be archived in the "which distro is best" ongoing thread and so there is some continuity and permanence to what people put so much though into saying. Or maybe just an archive of all the highest scored posts??)

    Anyway. I think I'm hella off topic and wasting bandwidth but maybe i won't be moderated down. /. is important and cool and great. We have a good thing going here. (thanks cmdrtaco/hemos/andover et al!!)

  • I think that Be's experience shows that at least part of Wall Street is beginning to wake up to the fact that not everything with a ".com" after it will make oodles of money. Unfortunately, some worthwhile companies, with more to sell than a flash-in-the-pan idea and a web page, will also fall victim to this. Be and Red Hat could be among those.

    Don't be fooled by the stock market into thinking that Linux and its associated companies are going nowhere. Even if the various Linux OSs do collectively fall on their face, the Open Source idea and movement are more than resiliant enough to just keep on trying and improving. The stock market doesn't make companies (though it can break them), and similarly the success or failure of a few Linuz companies won't doom everyone to the likes of M$.
  • Besides their grammar error ("could move up substantial" -- should be "could move up substantially") I noticed one more error in this story. It was reported that Be closed up 1/16 to 6 1/16 on its opening day; however, Be closed up some 30% to over $8 per share on its first day. Alas, he correctly notes that Be is now back around $6, and it hasn't moved much. Volume has also dropped to only a couple hundred thousand shares a day. Oh well.

  • Perhaps (Score:1)

    by Tim ( 686 )
    I've been worried about the same thing since Red Hat's IPO became common knowledge to the media. After all, it is NOT in Red Hat's best interests, financially, to mention other distros near the time of their IPO (or to correct media blurbs to do so). As Bob Young is so proud of saying (I paraphrase) "All Red Hat really owns is a brand." It just doesn't make good business sense to mention other brands when you're trying to make money off of your own, so I don't really expect this situation to change.

    However, I don't believe Linux has to become synonymous with Red Hat, because:

    1) Linux distributions for other platforms make it hard for the mediia to accuse other brands of borrowing "Red Hat's" code. LinuxPPC, YellowDog, etc. are becoming more of a presence now, and the media is too thick to understand that a Mac operating system could use the same code as an Intel OS.

    2) Caldera, at the very least, has a good business presence--they've targeted the office, so their name still makes rounds in the business world. If they IPO, they will likely carry a buzz as a "competitor to Red Hat."

    3) All of us know better, and if history is any indication, we'll scream bloody murder if "Red Hat's Linux" is bantered around too casually. =)

    My 2/100ths of a dollar.
  • Amazon.com makes how much profit?
    And whats its stock price?

    I think RedHat will do much better than you think. And quite deservingly so.

  • Stocks themselves are mostly unpredictable, especially in the short term. And IPOs are much more so. Anyone who says what they think it will do, still doesn't know.

    In general, it's a hyped-up IPO so most hunches seem to be that it'll go up a lot just after it opens and then it's anyone's guess from there. But if you throw money into a volatile investment like an IPO, be prepared that it might not do well, just in case. Don't do IPOs if you can't consider and plan for that possibility.

    Of course, we all wish them the best. After all, it's the first Linux-based IPO.

  • It was on Yahoo news, not ZDNet
    Read it again; it was written by Larry Barrett of ZDNet.
    I did read the article, and while it's more intelligently written than most, it still contains no new information or even any insight.
    I didn't like it.
  • The whole world is watching, but what they're seeing is "Not-Microsoft." That's a far cry from "Linux."
  • For a time (from early on, actually) Be ran on Apple's hardware. But Apple has clearly and publicly shut Be out of their hardware for the forseeable future (not releasing any hardware specs, and openly showing hostility towards Be). I think even the Be enthusiasts have written off the Apple hardware and PPC port. (feel free to correct me if you're closer to the pulse on this matter- hey, I wouldn't mind learning different).
  • ***** THIS IS ONLY A GUESS. Do not make investment decisions based on it *****

    Offer price: $12
    Starts trading in midday: $25
    Peaks at: $40 (probably an hour after open)
    Closes on first day: $30

  • Look at the byline--the article is from ZDNet.

    I'd hardly call the article in-depth. It danced around, saying it's a "much safer bet" than the standard Internet IPO without really explaining why, then makes a comparison to Be, Inc which ignores the fact that OS sales plays a relatively small role in Red Hat's future business plans. Overall, it isn't even a particulary good specimen of punditry.

    As for moderation issues--I'm sure Rob is working on improving things. Don't forget that this sort of public moderation is quite new, and there will be a lot to observe and learn in Getting It Right.

    -Ed
  • The future profit stream of Amazon is no more a sure thing than the future profitability of Red Hat. Red Hat has made money in the past, Amazon has yet to turn a profit at all. So ask yourself this, do you have more faith in something that has proven that it can make money, or something that hasn't proven that it can make a dime?

    --Kit

  • Could you explain a bit more what do you mean by "BE's experience" ? I assume you mean BeOS makers , right ?
  • I think Netscape has become a little more stable with 4.5, but I feel the pain of hapless Netscape users (including myself). In all honesty I don't think Internet Explorer is much better - I've seen both of them crash and burn badly. The main problem is the god-awful fonts. :-(

    BeOS: Is it what Be says it is? Yes. It really is fast, it really is stable, it really is slick. And application support is getting pretty nice - if you're willing to pay from $ 20-200 for applications, you can get some very nice ones. This is cheaper than Windows, but admittedly more expensive than Linux.

    The Be web browser is a good demonstration of both the strengths and weaknesses of the OS. It renders pages attratively, new windows pop up in under a second, the user interface is smooth and crisp, if one window is hanging waiting for a sluggish web site, you can pop up a new window and immediately go to another one. This is all fantastic; you'll love it.

    But you'll hate it because it supports very minimal JavaScript and no Java. Nowadays a lot of web sites rely on those languages, so there's a surprising amount of content you simply won't be able to get to.

    That's not a bad metaphor for the entire OS - what it does, it does better than anything else out there, but there are some exasperating gaps. The biggest gaps are in driver support - a lot of devices you take for granted in the Windows or even Linux world don't exist in Be. The other major gap is that I don't know of any utility for viewing or editing Microsoft Word or Excel files. Hate them as you may, there are times when they really need to be decoded :-(. However, I think this is changing in the newer versions of GoBe Productive, the native Be office suite.

    If $70 isn't enormous money to you, I think it's well worth handing to Jean-Louise. It's not totally there yet, but it's getting close, and it has the most appealing personality of any other PC OS.

    Hope that helps.

    D

    ----
  • Absolutely. Open source will continue with or without Red Hat. As long as we have freedom of speech, we'll have open source.
    I personally think that Red Hat will do reasonably well. The primary factor behind the success or failure of a tech product is not it's underpinning, but a basic level of ability to meet consumer demands combined with savvy marketing.
    Open source naturally evolves to meet it's users needs. Both growing commercial involvement and increasing grass [norml.org] roots efforts are accelerating this evolution.
    (sorry, couldn't resist the grass link!)

    Red Hat has shown they they are quite skilled at marketing - having (for better or worse) appropriated the largest portion of the media's attention to the open source movement. I'm fairly confident that they'll be a player for many years. Thankfully, the nature of their product insures that they are not the only open source entry into the market - even if they are the largest.
    As long as Red Hat manages to control costs and continues to get advertising and media coverage, they'll pull a profit - how big is the interesting question. I don't think it'll be huge, but it'll be there.

    The greatest thing about open source is that you can't kill it. No matter how hard it's detractors try, it won't go away. It's the achilles heel for Mr. Bill - a competitor that can win, but can not lose. No matter what investors think, it'll be hard to beat Red Hat, and impossible to beat open source itself.
  • Good question. I know I want RHAT partly for the emotion/religious aspects of it. But I also think it can make money. Enterprise support doesn't sell for peanuts.

    I *AM* willing to bet my money - and pretty much all of it - that Linux will eventually become one of the main dominant OSs (if not THE dominant one). That's why I bought Corel, and that's why I'll buy RHAT. It won't happen overnight, but when it does, it should pay off.

    What needs to be decided is this: When Linux becomes the dominant OS (not 'if' - I'm quite sure it will happen), what will that mean to RHAT? It will have lots of competition, sure, but people will still be willing to fork out $50-$100 for a nice box, manual, and support. Especially when more newbies start using Linux. And they will. And RHAT has the distribution channels to get most of those sales.

  • What did you get? As soon as you press the "submit" button, it tells you whether you "passed" or not. What did it say? (It must have said something!)

    --

  • Uh, didn't they say 6,000,000 shares? Doesn't that mean 60 million dollars worth? Or is the 6,000,000 just what they are releasing and doesn't accout for other investments?
  • Uuugh. Who *doesn't* want a part of the set-top-box market? Come to think of it, who *does* want a set-top-box itself? I know I couldn't care less about them.

    I think Be is a long shot to go anywhere. I sincerely hope it does (but at the expense of 'Doze, not Linux). But this stock will ONLY do good if they start to get some mainstream marketshare.

  • $0.00 (Score:1)

    by Micah ( 278 )
    *That's* how low it could go.

  • NOTE: M$ is my lame substitute for Microsoft.

    Mudhiker has two major points, that I agree with.

    1. I like the idea of a NEWBIE place that people can hang out that don't know a whole lot about the /. "culture". I am currently a student at WWU studying for my Computer Science degree. Unfortunately my school seems to by M$centric and teaches using their tools (probably has to do with the fact that I am not to far from M$ centeral). It isn't until recently that I even found out about Linux (through friends). Slashdot seems to be the best place for me to learn of the latest happenings in the Linux community. The only problem is that I don't understand half the words that people are flinging around. Maybe, there could be a special coloumn in slashdot everyday dedicated to the BASIC's in linux.

      One topic that I have been doing extensive research on is PPP. (still can't get RedHat to connect to my ISP!!!) I know that I should go "Read the documentation" (been there done that), but doesn't everyone prefer to chat with someone to get there problems solved (I know, go through IRC)?

    2. I am sad to say this, but Linux still doesn't have mindshare. Of course we all like to talk about how Linux will rule the world, but get real. There is no advertising for such a thing, and people don't want to trust a bunch of people that call themselves "Hackers" (let's not go there).

      I DO trust "Hackers" because I am one.

      I DO want to use linux, but I don't have a clue how to re-compile my kernal with PPP support (last time I tried, the kernal wasn't worth SH!T).

      I DO use Apache to test out my web page projects.

    Linux rulz, but there are a few things that need to happen before this statment can take full effect.

    1. First, What do people use computers for the most out of everyday? No, it isn't surfing the 'net. Everyone needs a good WordProcessor. M$ is still number one in that arena.
    2. Second, Some GOOD instructions on how to connect my computer to my ISP. M$ and AOL are still #1 when it comes down to making that process easy.

    PS:I love linux.

  • I've run BeOS on my PII. As previous posts mention, Apple is not giving them specs on the G3, which is sad and not very nice. Unless I'm wrong, the LinuxPPC people didn't get G3 specs - they just reverse engineered much of it. I guess the small staff of Be doesn't have the resources for that.
  • The company founders and other people who invested before the ipo(intel and others) still own a majority of the 67,000,000 or so shares of redhat that exist. So the 6,000,000 is just a small part of redhat overall.
  • According to this story [yahoo.com], the 6 million shares represent about 9% of the total equity in Red Hat. That means there are a total of 6000000/.09 = 66.7 million shares total. Assuming that the IPO price is $12/share (the high end of the range), the company is worth 66.7 million * $12 = $800 million.
  • How bad could it get? It is at 6 or so right now. I wonder how low it could go?

    Ken
  • An IPO article without news about the fiasco? That definately lacks spice.

    Do not expect to see any major development on the Red Hat/E*Trade fiasco until some time after the IPO happens.

    Hypothetically speaking ( wink, wink, nudge, nudge ) people are going to wait until the IPO. This way, they can put a dollar amount on lost income due to E*Trade's questionable activities.

    This story is NOT going away.
    --

  • There's a story about how the RTP is all abuzz about the IPO and the profit potential at http://www.news-observer.com/
    (click on technology link in lower right hand page corner

    and a story about the new RH marketroid at http://www.news-observer.com/daily/1999/08/07/biz_ index.html#top

  • Compare that with, say, Yahoo's losses per share.

    Yahoo has generally made a profit for the past two and a half years; it would have again last quarter except for the money it spent on acquiring GeoCities and Broadcast.com. (Since those were one-time charges, technically it was profitable.)

    Of course, Yahoo's stock valuation is a few hundred times its earnings--much higher than almost any non-Internet firm. And certainly much higher than RedHat's will be, assuming it actually does prove profitable. That is, unless investors begin seeing as strong a potential for growth in Linux and open-source as they do in the Internet.

    This was my beef with the article: it said that RedHat was less risky than an Internet IPO (which I agree with) but never quite explained why. They aren't primarily an Internet company, nor are they a traditional OS company, yet those are the two things the article compared them to. Like so many articles of its ilk, it never quite found a clue as to just what RedHat is.

    -Ed

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