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Red Hat Software Businesses

Red Hat IPO All Over the News 59

Posted by Roblimo from the plenty-of-slashdot-quotes dept.
Most small company IPOs have at least a little disorganization and hype surrounding them, but Red Hat's was over the edge. We're not even going to try to sort out the claims and counter-claims, the complaints and counter-complaints, and all the rest, just point you to a selection of stories on the subject, not all of which agree 100% about exactly what happened, when it happened -- or to whom.
I found a bunch of other stories too, but they all said pretty much the same as the ones I listed above. If you spot any more good ones (or have any good stories of your own to tell), please post them below.
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Red Hat IPO All Over the News More

Red Hat IPO All Over the News

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  • One of the sources must have been the HOWTO list since other things (besides patches & enhancements) I released under GPL are not in RedHat.

    I wish that the IPO had not been restricted to US residents, this majorly sucks and has been predictably ignored by the majority of the mostly US-centric online publications.

    Linux has been created through the work of people that reside in many different countries, and thus some method should have been set up to help them partecipate in the IPO if they so willed.

    Hear me well: I did not do any of the work I did for Linux and the FSF in order to earn money, I did it in order to be able to give something back to the community, God knows that it would have taken me a lot longer to get my Masters if I wouldn't have been able to install Linux (1.1.something back then) at home rather than have to take the train to the University lab every day.

    Let me clarify, I am not upset because of the economic side of things ( even if I could sure use some extra cash ) but because of this offer's US-only nature.

    Now let me step off my soapbox and get back to work.

  • Single-share stock price is meaningless. MSFT would be trading at over $1000/share now if they hadn't split the stock numerous times.

    More meaningful figures:
    Microsoft Market Capitalization: $475 billion
    Red Hat Market Capitalization: $5 billion
  • In some ways, what you say makes psychological sense. We already know that managerial turnover at MSFT is high, and that MBAs don't want to work there, but rather in startups. If they and the developer trainees start noticing that RHAT is flying up while MSFT is not, they may sense that the wind is shifting and reevaluate their career plans. This will raise the labor component cost for MSFT and help with mindshare shift in the tech and business communities.

    But, as someone else noted, Red Hat's total valuation in no way compares to MSFT's. But who knows, we may make Fortune 100 by year end!

    Now if E*TRADE would just do something for those of us not in the Affinity program but who had confirmed by phone re the $12-$14 range ... I might be a tad happier, but right now I've got $51K burning a hole in my pocket and no shares to show for it.

    I wonder how expensive it was for them to fill all those 8000 rejected allotments from their float? Let's see, 8000 x (72-14) x 100 shares = $48+ million. Assuming the average fill was 100, since some got 400 but some had been accepted. Hmmm.

  • When you say dethroning Microsoft, I hope you mean from the OS/Server market, because that's as far as its going to go.

    Microsoft is the second largest company in the world, which means they own shares of a ton of other companies, and they're involved in a dozen of other industries. They're in hardware, entertainement, TV, cable, telecommunications and even art!

    This Red Hat IPO is a good thing, and it's good news for the Linux community, but Bill Gates can get rid of about .1 % of his shares and buy Red Hat outright.

    Also, keep in mind that because things are going well now, it doesn't mean they'll always be like that. Remember when Java was supposed to replace C++? Could anyone have predicted competition for Windows before Linux? Don't think so.

    "Know the facts before distorting them"
    - Ernest Hemmingway

    BH
  • Perhaps the most interesting line reads, 'Analysts worry that this could destroy the cooperative mood that has been a feature of the Linux community and a key reason for its success.'

    Hee hee hee! That's a good one!

    Obviously, these reporters never read /.. Someone should let them in on KDE/Qt vs. GNOME/GTK+ or GPL vs. BSD, etc. Show them some fine examples of "cooperative mood". :)

    For that matter, how important is a cooperative mood to the success of Linux? Who really needs to cooperate besides people in on the same project? Personally, I think the competative spirit between projects like KDE and GNOME does a lot to help 'the cause' (as long as they can agree on some common protocols)...

    --

  • I dont care what anyone says. I bought Redhat stock and made a 50% profit in one day. If it makes me money i am not complaing much about anything. Let it become a bloated microsoftish evil empire. ill just go with Debian...or if i get tired of Linux...FreeBsd!

  • Oh, don't be such a naif. The only reason Red Hat, Corel, VA, LinuxCare and the rest exist, is because they want to make money!

    Let's face it, Open Source has gone mainstream and it'll never be the same again... The community has passively stood by and allowed itself to be hijacked and taken advantage of by people who are only interested in making money.

    Ultimately, companies like Red Hat are bad for the community, because they are taking the place that Linux experts would fill within companies who deploy Linux.

    Instead of hiring a Linux hacker to set up and support their systems, these companies are going to be signing contracts with Red Hat and LinuxCare.

    These companies are going to be steering the future development of Linux and other open source projects, unless the community gets it's collective ass in gear and comes together under a single representative organisation.

    But that's not going to happen, because there is too much infighting in the Open Source community and the individuals who might have enough respect to gain the support of the community don't have the necessary skills.

    Kernel hackers aren't strategists and vice versa, unfortunately (which is why I'm not a programmer and never intend to be). Instead, the strategists' place has been grabbed by businessmen whose only motivation is making money.

    Face it - we had a chance to retain control of our software, and we let it slip through our fingers. I'm just glad I'm not one of the guys who actually developed Linux. I respect them greatly, but I know I'd be hating myself right now.

    D.
    ..is for Defunct.

  • I say great for any programmers that made money in the IPO. Now quit your day jobs and work on Linux full time and make me a better OS. :)

  • Linux moves into high-gear.. (Score:3)

    by Bowie J. Poag ( 16898 ) on Thursday August 12, 1999 @07:16AM (#1749696) Homepage


    I really think we're all totally missing the big picture here..We're all getting pissed off about money. We really shouldn't be. When you step back and look at it, ignoring all the buzz and all the numbers, the money doesn't even matter. I mean, think about it..Did you get involved in Linux because you thought it would make you money? Or we doing all of this because you believe in the platform? For me, its the latter. I like Linux. Infact, I like it enough to devote some of my time to making it better.

    What matters is, we're moving ahead. All of us. Not simply a bunch of guys who either got incredibly rich by pure luck or got rich by lying their way into an IPO. Sure, everybody loves the money..but getting rich isnt a necessary part (nor has it ever been a part) of the process of improving and strengthening Linux.

    The fact that Red Hat's stock sits at $73/share right now isnt going to stop me from doing what I do, and making what I make. What the Linux community is doing right now is a necessary step on the way to dethroning Microsoft. Part of that means becoming a household name, which we're well on the way to doing. Somebody has to hit the beach first -- and for us, that happens to be Red Hat.

    Were at the beginning of something big, not the end of something small.

    Bowie
    Founder, System 12 [system12.com] / PROPAGANDA [system12.com]
    Bowie J. Poag
  • I have a friend who got notified by E-trade about needing to resubmit his Intention of Interests. He called TWO hours after the letter was sent. They told him it was too late. He had submitted a request for up to $20/share last week, but for some reason that didn't cover the $14/share it opened at (okay!?)
    Anyway, with in one hour of his denial he was filing a complaint with the SEC and is currently looking to find a lawyer to sue E-Trade.

    All I have to say is that the timing of the last minute change in price and demand to resubmit are very suspicious. Exactly HOW many people got SCREWED by this?!
  • Agreed. I didn't buy any RHAT, but I do make my living from implementing OS technology, as well as the "other" kind.

    I wonder how the RHAT IPO is going to change the open source and free software communit(y/ies)? Will the two schools of thought become more different? Will the free software movement become forgotten? Will the urge to contribute free software die?

    John

  • Can someone please tell me how the people who recieved The Letter [news.com] were choosen? AFAIK, it looks like it was just Friends and Family [news.com] of people working for Red Hat that got the chance to buy stock first... "800,000 IPO shares for "directors, officers, employees and friends of Red Hat," the filing said." (Hmm... Isn't this close to "insider trading?" Well... Sure wish I would have got "The Letter" ;-)
  • My friend is -not- a member of the open source community. He is an elementry school teacher. (How's that for altruistic you ass.) He mereley hoped to make some money off of the stock option. -I- being a believer in Linux, and the ideas it represents, had told him that this was a great oppurtunity. That even if the stock didn't do great he would be supporting a worthy cause. He feels screwed by E-trade (not a member of the open source community I might remind you). So before you jump on -my- back for -my- greed keep in mind that -I- did NOT participate in the IPO and had very little desire to do so. I'm just a software engineering intern working for a small company in southern california. You can hide behind your AC all you want, but the name fits, and you're wearing it.
  • Do you think that you could possibly
    remove your distribution war stupidity
    from your your idiotic conjecture.
  • Hello?

    Now we know why E*Trade has a form to fill in to make sure you have some experience before getting in on this.

    Almost *all* IPOs get repriced outside of their range, either above or below.

    Maybe E*Trade did a bad job communicating some information, but they are used to dealing with people who know a stock from a hole in the wall.

    Geesh.
  • Well, as you can see from the cNet story (oh, one coming up on Salon, and you might want to check the WSJournal), I'm not very pleased with E*TRADE.

    I will say that major kudos should go to Red Hat for sticking up for you guys and to the SEC for proving that our taxes and fees can help the little guys out there, not just the big boys.

    Will in Seattle
    day 2: 0 shares, $72/share ... tick ... tick
  • You're absolutely right. I based my calcs on the initial 84M offering, and not on the current total value of Red Hat, which is currently ~5B.

    With this in mind, the current market cap of Red Hat is still worth only 5% of Gates' personal fortune. Kind of puts things in perspective.

    "Know the facts before you distort them."
    - Ernest Hemmingway

    BH

  • but Bill Gates can get rid of about .1 % of his shares and buy Red Hat outright.

    No.
    The market capitalization (the price per share X the number of shares) is just under $5B at this point. BG does not have $5000B. He could buy up Red Hat, but it would not be insignficant anymore.
    Red Hat now represents a lot of money. There is suddenly serious money in Linux. What this does to the perception of Linux in the CPU (sorry, I just can't say "mind" in this context) of the average PHB is very, very important.


    Fear my wrath, please, fear my wrath?
    Homer
  • "by Anonymous Coward" is definitely right here.

    Cripes, more Red Hat bad mouthing. Why don't you put up a real name or shut up.

    Red Hat user, and proud of it.
  • Right now RHAT is a concept stock, based on the potential of Linux to do well. What's not so obvious is how RedHat is going to cash in on Linux's growth to the extent required to justify that $5B market cap. It may stay up there for a while, but at *some* point, fundamentals and reality will come to bear....

    Let's be very generous and say that RHAT deserves a huge 100 P/E, so that $5B cap. would require $50M of earnings. So even at a huge 50% margin, they need at least $100M in sales...

    But their last year's sales were only $10M, so even sales were to increase by 100% a year for the next 3 years, that would only take them to $80M - in three years time.

    So it would appear that *todays* RHAT price *already* reflects an assumed 3 years of sales doubling, a fat 50% margin, and an extrememly generous 100 P/E ratio.... seems to me there's not much room for ANYTHING to go wrong, and no upside even if EVERYTHING goes right...

    Caveat emptor.
  • I agree: whatever Red Hat does with it's newfound wealth will help the open source community. What greater benefit could we ask than an open source windows emulator? Certainly the task in daunting. Even after years of development, we can be sure M$ will change their code to make it incompatable with whatever the open source community comes up with.
    However, Red Hat now has the money and can certainly get the talent to do it. (What is the ratio of applications to jobs at Red Hat? More than 100 to 1?) The project would have to be supported indefinatly, and that's exactly why it will have to be open source. Any propriatary software to compete with M$ won't sell - and for good reason: if the competetor to M$ goes out of business, the software will die with them. And we can all imagine what M$ would do to such a potential competitor.
    So why should Red Hat do it? In the short term, the media interest it would create would benefit the stock further. In the long term, the financial gains from sales of books, support contracts, etc. would be enormous. (The recent paper by E.S. Raymond, The Magic Cauldron
    http://www.tuxedo.org/~esr/writings/magic-cauldr on/ addresses just this question.)
    I think Red Hat is the first of many Linux distributions which will have this unique opportunity. My question is only: are they the ones who will actually do it? If so, I think I'll check into their stock, whatever it's current value - the potential is virtually unlimited.
  • aperantly, I think Red hat just wanted to do the right thing, and earn some good karma with the open source movment, but E*trade really screwed up. What really sucks is that Red Hat didn't do anything wrong at all (exsept for make the terms that E*trade was going to opperate on a little clearer)
    "Subtle mind control? Why do all these HTML buttons say 'Submit' ?"

  • Feh. I just submitted this on the main form when Roblimo [primenet.com]'s post shows up on the page.

    The LA Times [latimes.com] has a nice summary article titled Red Hat's IPO Battles Timing, Microsoft [latimes.com] detailing the positives, flaws, and hurt feelings of the Red Hat, Inc. IPO. Perhaps the most interesting line reads, 'Analysts worry that this could destroy the cooperative mood that has been a feature of the Linux community and a key reason for its success.'

    Any comments on this?

    --

  • I think those of you who were lucky enought to get into the preipo will be very lucky. Even my brother who has never ran linux is going to try to buy some RedHat stock on the ipo.
    How could I have been let into the redhat pre ipo?

  • I called my stock broker (yes I actually have one) before the market open and asked to buy as soon as it opens and before it hits 60.
    Well he had about 10 minutes to do so and I'm still waiting to hear from him if he did.

    I'm expecting that it will come back down to 40 (But not betting money on it :), when all those who have invested because it is a so called "internet stock" (although I know it isn't).

    If Red Hat uses this new source of revenue to good use, I think they have a potential of being a $120 stock. But if the don't use it well, then they are going to have problems and that will be the time to sell.

    God I wish I got "The Letter", I may have even qualified to buy!

  • Basically my story is the same as other affinity group folks. I too got completely contridictary information from e*trade. I too got the "reconfirm" insanity, but I did get phone calls from e*trade telling me to get in there and reconfirm--little good that it did at the time. I too got the "no shares allocated" message. But in each case, when it finally dawned on me to say "BUT I'm in the AFFINITY GROUP!" things changed for the better.
    Now I have almost as many shares as I requested and I'm not disappointed. (of course what I got was small potatoes, but I had expected nothing and I appreciate Red Hat's thinking of me).
    Now will VA do something similar?

  • My Story - "How I got my allocation" (Score:2)

    by Anonymous Coward
    This is an update to the ETRADE bashing that's been going on to date. I've got some positive and negative comments, and a description of my path to Red Hat shares that I think lays out a good picture of what happened yesterday, and is probably continuing to happen today.

    I got up at 7am PST (early for me, on flex time) to check to see if my "affinity shares" were allocated. Instead I see, on the ETRADE IPO center, the message about confirmation of interest. By a fluke, I get in and reconfirm in that short time window.

    A little later, I also get the email saying that I should go and reconfirm by sending mail to ETRADE through their Account Services, and I take care of that as well.

    A few hours later, I get an alert in my ETRADE account saying no allocation. Big disappointment, but I wasn't guaranteed anything from the beginning. I could live with that.

    Then, things started getting interesting. Two hours after the no allocation message, I get a call from ETRADE asking me if I had reconfirmed, and if not to do so. At this point I thought that some person in ETRADE had a list of people to call for confirmation of interest, and was finishing the list, even though some of those people had already been passed over for allocation. So I asked her, and she said the allocation for affinity shares hadn't happened yet, and sounded confused about by "no allocation message." My hopes started to rise, but at that point, I thought the odds looked bad.

    About eight PST last night, one of my coworkers, also an affinity shares type, got an ETRADE alert indicating that he needs to reconfirm via mail (he reconfirmed via the web form for non-affinity members, and had thought that sufficient).

    I looked at my account, and shazam!, there was my allocation of shares at the IPO price!

    In the end ETRADE came through, and the Red Hat price justifies the confusion along the way. However, ETRADE sure could have done a better job communicating what was going on. Had I decided to empty my account of cash after receiving the first bogus "no allocation" message, or to invest it elsewhere, I most likely would have received no allocation. (Although, given the way the ETRADE support lines have treated me so far, I imagine that they'd have fixed the mistake later). If Red Hat's price had plunged or skyrocketed, and I wouldn't have been able to make a decision about selling.

    All in all, I'm happy with the way things worked out. But better communiction would have been nice.

  • The real gains--dwarfing even X number shares one might have bought--will come from the soaring demand for Linux skills. Sure, we all wish we could have invested tons in RedHat as "privileged investors", but in the years to come, the demand (and high fees) for Windows-to-Linux migration projects are going to be fantastic. I for one am pledging to myself to give back a bit, and donate a bit every year to the Free Software Foundation--without RMS's stubborn vision over the years, none of this would be happening today. Anyway, there's going to be plenty of lucre for everyone who is deeply into Linux. I just hope we hold onto our ideals as the greenbacks roll in. I think we'll be up to that challenge, though.
  • Red Hat is not Linux, and analysts are thinking about Linux the same way that they think about other industries.

    The next time we hear from analysts it will be something like "Massive flamewar on Slashdot worries analysts who are concerned that this could destroy the cooperative mood that has been a feature of the Linux community."

    This is a C++ analyst function:

    NormalEvent molehill;
    Conclusion *mountain;

    // contruct new mountain object from molehill
    mountain = new Conclusion (molehill);

  • insider trading is more like telling a friend that
    "our stock is going to crash since we didn't make
    our numbers" or something like that. giving stock to employees and "friends" is just giving stock options, it's perfectly legal. if it wasn't sec would have done something. "friends" are people who have written code that is on the redhat distro in some form.
  • Currently, according to Yahoo! RHAT is trading at
    74 3/8 and MSFT is at 83. MSFT has been slowly slipping since this morning (opened at 84 3/16) while RHAT has exploded.

    What will the financial pundits say when RHAT closes higher than MSFT? I feel the tide is turning, mon freres'.

    John

  • Red Hat's strengths are its marketing and branding in the eyes of the public. From this it leverages support agreements and co-branding deals with S/W companies. But, unlike MSFT, it neither controls nor forces Linux to comply. We can ignore Red Hat desires as we wish, and a better code alternative can still win in Open Source competition, although if Red Hat does not support it, we have a higher bar of proof that the code is "better" than the Red Hat distribution.

    In the Linux sphere, Red Hat is associated with Linux in the eyes of the public, but to us it is merely one popular choice. Synergistically, it is a "safe bet" for the PHB to choose Red Hat brand, as they know they can get support and their s/w will work. Plus, added bonus, they get source code!

    Because the monied classes now have respect for Linux, this contributes to the dissolution of the MSFT monopoly on the mid-range/server/workstation side, while eating into the virtual dominance of the desktop. Linux is hot and a desireable skill, while MSFT is not and its stock options less attractive. So, we win mindshare ...

  • Sure, we heard this before. "Watch out because the BeOS IPO failed miserably. Yep, if you're not Microsoft the IPO is going to bomb. BeOS is the ultimate proof". Well, after the IPO, what do we have? More of the same. From a quote on the ZDNET story. But before anyone gets too excite about the IPO, keep in mind that Be Inc. (Nasdaq: BEOS), which also offers an alternative operating system, was practically laughed off the Street on July 21 when it went public.

    So what in the world is that? Well, okay, the first day went good but you're still not Microsoft so you are doomed? Come on, it was successful. Say so and move on. Don't blabber about your little nephew Horace's IPO and say that that proves anything.

    -Brent

  • The price/share of stock is basically meaningless. The only reason MSFT is down around 70 is because they've split about a dozen times. For example, INTC (Intel) is ~76 today. I bought a bunch of shares at ~90. I'm happy about the value though, since the stock split 2-1 recently- without that my shares would be worth ~150. Without splits MSFT would be worth well over 1000/share. (Anyone know exactly?)

    Check the market cap- that's the actual value of the stock. MSFT is 100x that of RH, and both are severely inflated.

    Eric

  • Agreed. Linux is one of the primary reasons that I've stayed at my current job. As part of a small IT department (a manager, myself and a tech), I have had the opportunity to realign our network operating systems from Windows NT to Linux boxes. When my previous boss left, it was a golden opportunity for me to get rid of NT in the server end and let Linux shine. I am midway through a conversion process that also includes LDAPifying everything and although I've had offers of higher pay, the experience I'm gaining now is something I believe I can cash in on in the future. Not that I live for money or the materials of this world but if someone is willing to pay me for the skills I have, I won't turn it down!
  • They'll say that redhat's stock price shot up because of hype about them and the stock then settled down to a reasonable price. I have my doubts that everyone at microsoft will suddenly quit their jobs because another company's stock price closed higher 1 day.
  • Yeah, that would be neat...except for the fact that outstanding Microsoft stock is literally worth 100 times what the Red Hat stock is worth, since there are so many more shares...stock price isn't really all that important, compared to the Market Cap. Although Red Hat is really making a name for itself today.
  • I'm not afriad to post my name, real or otherwise. Like it take cajones to post under "Cyber Bear!" I agree with the Anonymous Coward. You can read more at

    http://www.scottbushey.com/aboutme/

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