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Red Hat Is Now Part of the S&P 500
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."
Congratulations.
Could this be the Year of the Linux Stock Market?
Funny may not give karma, but +5 Informative never made anyone snort coffee out their nose.
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!
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.
Vaya con huevos, my darling.
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.
#fuckbeta #iamslashdot #dicemustdie
I seem to recall that NYSE does. Then again, I'm old.
They may have switched to Linux at some point.
I think too much significance is being given to this announcement. Linux has already been quite dominant on the web for some time now. But most people couldn't care less about what delivered their content. How would you even know? Aside from server side errors.
RedHat's best contribution is Tom Lane to PostgreSQL.
My ZooLoo
As linux is EVERYWHERE anymore. Just about every small business and up runs it in some capacity. It runs major businesses too. Everything from big iron to the embedded market runs linux in some regard. Hell, Cisco's ASAs run a linux kernel.
Were this a true representation, linux companies would account for 60%+ of the tech companies listed in the index. Which is a bullshit measurement anyway, so I'm not sure what that statement was supposed to mean.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
Their market cap is only $4B, which either of those two companies could spend w/o blinking. I suppose a bidding war could drive up the price to twice that. Remember, RH also controls JBoss, Cygwin, etc.
The loser gets Novell.
2009 - the year of Linux on the stock market
Next milestone - the desktop!
"Red Hat .. bully customers just as well as other non-Linux open source companies, so good for them"
Where, how, please provided verifiable citations.
Congrats on Red Hat reaching the big league. I've got a couple of mates who work for Red Hat, and they say business is booming in the downturn, because they're picking up a lot of business from people looking to save money through Red Hat's Open Source-plus-support way of doing things. I wish Red Hat luck.
Sadly, this doesn't seem to have been the case with CIT, whose criminally incompetent management decided that letting the Government bail them out, was a better business plan than running their business as a going concern.
Too bad Anglo-American culture is far too tolerant of failure, particularly in the business world. The fat cats need to be taken down a few pegs -- and serious repercussions for failure are needed.
The big problem with the government bailouts on both sides of the pond, is that the captains of industry are scum, by and large; and will find a way to be "too big to fail", and profit by bludging off people who pay their taxes and do the right thing. Thankfully, the chaps in charge in the US have let CIT fail. After all, private business are full of people who preach the benefits of free markets in the good times. The Obama administration are wise enough to allow them to be destroyed by the remorseless logic of the free market when they are too weak to survive.
The incentive of profit and personal gain, as evidenced by the commercial success of Red Hat, is helping Linux to gain traction against Microsoft Windows. How ironic. This open source blend of passion, underdog romanticism, genuine need, and profit motive is an awesome story and it must have Bill Gates shaking his head in disbelief.
"While this means little directly for the company..."
Not true. Inclusion in a widely-invested index almost certainly means an increase in the stock's price, all things being equal. This will be most visible up front as index fund managers buy in (because they have to). But there will also be a much larger base of investors that hold this permanently insofar as they hold S&P 500 index funds (or ETFs, CTFs, etc.). This could directly provide the company more "currency" to make purchases of other firms (by paying in stock), as well as give it an advantage in attracting and maintaining talent that are partially compensated in stock (assuming they award stock/options).
It could also result in more stock analyst coverage which would bring valuable publicity to itself and its shares, and likely also more "mind share" for Linux for the average investor that follows this sector/industry.
So how long until Congress debates whether they have to give Red Hat lots of free money on the grounds that they're "systemically important" now? :-P
Information theory is life. The rest is just the KL divergence.
A lot of mutual funds/index funds/etc. will now be buying and holding Red Hat stock, as well as other large institutional investors (i.e. large state pension funds/etc.). Same mentality as "no one ever got fired for buying IBM computers", it's not like fund managers are much good at this (witness the melt down in almost every mutual fund/hedge fund), most of them just follow the herd.
[citation needed]
My blog
http://en.wikipedia.org/wiki/S&P_500
Oracle and IBM suck ass
Irina Romanov
funny, my clients love Red Hat, most of them transitioned from Sun and it wasn't Red Hat who was the bully
Who says Opensoruce doesn't make money!?!
Somewhere in the idle backwaters of my life I've a copy of 'Revolution OS'. I can't remember the year it came out but /. was big on it, probably because Taco had a cameo. Redhat and linus were the darlings of the show with RMS doing a walk on but the punchline was the big noise the Redhat IPO made, followed but the nearly instantaneous downward spiral of it's stock price. Redhat, like Linux has stood the test of time and can rightly take a place on the S&P. Linux, like Redhat has gone from a wunderkind, to a dicey proposition, to a viable, entrenched market player. So maybe the 'Revolution OS' has come full circle and is ready to move on with a new face, but hopefully one still mired in remnants of Dungeons & Dragons lore.
ideopath @ play
Oracle has a Linux distribution that is remarkably similar to Redhat's and they have been on the S&P500 for a while.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
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*?
...But it is about as far away from FREE Software as it gets.
In fact, is it even technically Open Source either?
From the Red Hat site: "Available for immediate download starting at $80."
Um, 80 != 0, right? So, why would the F/OSS community trumpet this as a "win"?
Prove that statement with verifiable facts.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
This is fairly significant because passive investors such as S&P index funds, which are popular investment vehicles, will be purchasing shares for their portfolios. This will add more liquidity to the market for Red Hat shares which should help them garner more positive attention from investors. During these times of high volatility, the purchasers of stocks are constantly asking themselves, "if I get into a stock, will I be able to get out?"
I don't keep a lid on my coffee so when I walk around I look busy -me
Lol, somebody forgot to take their meds this morning.
Or perhaps they should avail themselves of a health system that actually works.
Oh, and showing up to the emergency room or dialling 911, after your unmanaged diabetes has made you go blind and your feet rot off, does not qualify as "coverage".
Not in a first-world country at least.
The "coward" line is absolutely, gut-bustingly hilarious, coming from an internet tough-guy Anonymous Coward.
The stupid, it buuuuurns!
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. :(
While this means little directly for the company...
Really, it means little? Large companies tend to prefer, and even require, doing business with other large companies. Being on the S&P 500 is an indication of Red Hat's size and staying power, and thus should increase the desirability of other large companies to do business with it. Wouldn't you think?
It's true. Comes with a downside (for the Open Source community) that other companies may begin to look at the possibility of an acquisition...
How many years before we see an article that says something like "Microsoft to buy Redhat", "IBM to buy Redhat", "VMware to buy Redhat", or "Oracle to buy Redhat" ?
Conceivably someone bigger whose market Redhat represents a threat to, could seek to buy them in order to just kill their product line, and make sure Linux never has a year of the desktop. That's one of my worst fears in all this.
Don't sweat it too much. Red Hat's product line is the Red Hat Network, not linux. Microsoft could buy up Red Hat and destroy their support business but they would simply be replaced by another support vendor, either an up start or an existing vendor, i.e. Oracle, Mandriva, Ubuntu, Novell, etc.
Now if Redhat could just pull in even 1/3 the amount per employee that MSFT or Apple do, they might be able to actually pay a dividend to justify their stock price.
Look at any finance service, such as Yahoo Finance or Google Finance. Microsoft's look-up symbol is MSFT. Microsoft's chart is here on Yahoo Finance. Red Hat is growing. Microsoft is stagnating.