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Red Hat IPO Update
malacai sent us
a press release
that finally gives some good details on Red Hat's impending
IPO. 6 Million Shares. $10-$12/share. The Week of August 9 (no
surprise that its during LinuxWorld). The symbol will be RHAT.
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The actual market value of the company after a $10 IPO would be $660 million. The $60 million is only the part of the company being offered to the public. The rest will be owned by VCs, Intel, and all of the other current investors.
Since Intel is already an investor in Red Hat, they own RHAT stock now.
Of all the comments I've ever posted, this is definately one of them
But Microsoft owning stock would give them voting rights. If the bought enough, then they may be able to get their people on the board of directors
Of all the comments I've ever posted, this is definately one of them
Ponder this....
As of July, 18, at 3 pm, there were 29,000 votes on the latest poll. Now, if everyone invested a measley $1000 for everytime they voted in the last poll, all of the people that voted on slasdot, would OWN half of Red Hat. Half is all you need to be the decision maker. I want to make another statement too, I'm investing $1000 in Microsoft, until Red Hat goes public, then all of the money I can scrape together is going to Red Hat, I'll see you when I'm rich.
Like distributed.net's setup, we must WORK together. In my opinion, it doesn't seem that difficult, if people had INITIAVE. I don't know how many people are going to end up reading this, becuase it was posted when this article was taken out of the limelight, but if enough people notice that I just MAY have a good idea here, this reply will hopefully be placed somewhere where many people will see it.
Sleep on it, and think about it. Unity is what COULD make it happen, then think about it, this highly unexpected mass purchase would drive the stock price way up, we all get rich, we invest in more Linux-related (friendly) companies, and one by one Linux technologies will become so popular companies like Microsoft will have no choice but to close their doors, and then, Bill Gates will see that Linux companies are the ones making money, he'll invest that $100 billion that he has just obtained (well nearly 100 billion, and I say that on channel 274 on directv [the investment channel], that Microsoft will annouce on Monday $500 billion in earnings) and that money will be put to good use!
Check out The Motley Fool for the whole story
Red Hat sells its stock for money, this money is used to expand their business: hiring more programmers and marketers, or whatever.
If people make money off of buying and selling Red Hat stock, so be it. It's not money out of Red Hat's pocket. The higher the stock price goes, the more money Red Hat has to play with.
Of all the comments I've ever posted, this is definately one of them
Whilst they won't make Micro$oft amounts of money from selling the OS, they could potentially make quite a bit as Linux gains in popularity (assuming it will). The support side can be rectified, especially with the money that the IPO will bring in. Companies depending on RH Linux would probably be quite keen to purchase support from them, if they're going to get good service.
They could also negotiate lucrative support deals with hardware manufacturers, simular to the one that Linuxcare have done with Dell(?).
I may invest a few quid, especially as I got RH6 free off the net - rather them than lining Bill's pockets.
HH
PCs are like air-conditioning. When you open the Windows, they cease functioning.Yellow tigers crouched in jungles in her dark eyes.
She's just dressing, goodbye windows, tired starlings.
I agree with your rationalization, especially where Red Hat's service organization is concerned. But I remind myself about such IPOs as Ebay and Yahoo. What do those stock prices have to do with logic I ask?
:)
I was a speculator who unfortunately bought and sold Ebay on its IPO day. Bought at 50, sometime later checked out Ebay website and panicked when I realized that I knew nothing about the company except for the media hype, went back to Fidelity and sold at 48.
Yep, I'm a schmuck, and everyone who's dabbled has these kind of stories.
But I think for Red Hat's IPO I am armed with a few things: 1. Linux media exposure is large and growing, 2. Linux acceptance in business is growing, 3. Company that has or is headed toward a monopoly in a facet of the Internet (like Oracle, Verisign, etc.) 4. Strong, strong branding. 5. New, fresh place for investors to place their attention (comptetitor to MS).
I'll be the first to say I have middle-tier sophistication in this stuff, but I've seen lots of opportunities go by where I took a rational approach and lost out because I talked myself out of it (Ebay, Yahoo, the list is long).
I also think that they still have time to build a great support organization, esp. with all that cash. Is there a clear leader yet?
Therefore I'm appropriating some speculative capital that's either going into RHAT or into choice "dirty" domain names
-Blanco
Interesting perspective - what would you do with millions of dollars?
Some people will amass as much wealth as possible, setting up trusts for their family and making generous contributions to the right charities.
These people are great because they are motivated not by greed or selfishness, but caring and the thrill of success - helping others.
I really hope that they do well. I am not of the camp that thinks that they are selling out. On the contrary, I think that they should finally be rewarded for the years of holding onto Linux even when it was just a hacker's dream. If it wasn't for Red Hat and the rest, Linux would have never cause Redmond any headaches at all.
Good Luck, RHAT.
As soon as it IPO's RH is legally required to support it's investors, not free software. Say goodbye to RH free software supporters...
inherited, to a degree, from the Linux movement itself, will be an interesting soap opera to observe.
To be sure, I have a certain hesitancy towards Redhat's public offering; I don't desire to see Redhat become the de facto standard within the marketplace, which certainly appears to be the case, as of late. Regardless of whether or not software is being written that is designed
solely for a Redhat system (we all know the answer to this), the fact nonetheless remains that the public itself is equating the two as one in
the same.
Thus comes the issue of the IPO. Shareholders mean control, it's as simple as that. My fears aren't of an imminent Micro$oftabsorption, either; I'm concerned about Joe Q. Stockholder.
I had a conversation with an acquaintance of mine recently, who incidentally, does not use Linux. I told him that I was worried about the Redhat IPO; Should Redhat become a psuedo-standard, coupled with public control, the likelihood is that Redhat would head down the path of proprietary OSes.
His response: "Well, if that's what it would take to see Linux succeed, why are you against it?"
I tried to explain that such would not be a success, in fact it'd be a complete departure from the whole philosophy. If Redhat were to become a
standard, what, then has been gained? If I can't run the same application on my debian system at home, if the company can't guarantee that it will
work outside a Redhat environment, how is that any better than the current situation?
"But you need a standard of some sort," he replied.
When I told him that the standard exists within the Linux community,development team, and ultimately with Linus, he shook his head.
"Corporations don't work that way, though."
- * -
And thus, there you have it, from the other side... and many others future stockholders like him share the same opinion. And while I
don't agree with their goals, I couldn't help but feel he was right. Corporate control eventually becomes proprietary by nature.
It's as simple as this:
1. People will use Redhat
2. Redhat will bow to the whim of its stockholders
3. Redhat won't be Linux, it will be whatever stockholders want it to be.
It boils down to Joe Q. Stockholder again. He will invest in Redhat for the money, not for any Linux philosophy. He'll do whatever he can to
make Redhat profitable. If that means making exclusivity deals with companies to have them only offer support for Redhat, he'll do it. If
that means striking deals to have software packaged exclusively in RPM format, he'll do it. Nevermind that Redhat code can stay freely
distributable; If Redhat is can rest assured that third party software/support is available for their distribution, only, how is the end
user any better off? In the end, Redhat would end up being Linux by architecture only, not by philosophy.
Come the day of the IPO, you can bet I'd like to get in on it. But you can also bet that money won't be my main objective.
Most shares will be allocated to the firms which underwrite the IPO, and the discount in the offer price is basically a gift to them, in return for sponsoring the IPO, and taking the risk that the company will turn out to be a total con job (they spend a lot of time auditing the books beforehand).
---- "If we have to go on with these damned quantum jumps, then I'm sorry that I ever got involved" - Erwin Schrodinger
You clearly do not understand that there are two kinds of people who have money.
Those that earned it and those who stole it.
The people who steal the money are attaining wealth at the expense of others. Fortunately, these people are in the minority.
The people who earn it are doing so because they are adding value someplace, and are being compensated for it. (They could, of course, inherit money from a person like this too) Most importantly, people who have money generally know how to make it work for them. They save, invest and grow their assets. There are people who do not know how to handle their money, and consequently they have less than they would otherwise have. People who do not know how to handle their money, and insist on remaining ignorant of this skill have no one to blame but themselves.
The average Joe you speak of, could easily learn how to invest and grow their savings. However, I wonder how many of these folks have even thought about how to manage their money.
I find it fascinating that people bash investors for being wealthy. Would an investor that didn't have much money be able to get a lot of clients ? Doubt it. Would you hire an attorney doing time? Doubt it.
Investors know how to manage their assets and how to take advantage of every opportunity they have. No, kidding they will use these skills to maximize their holdings. If these skills are used in a situation that is illegal--well that's another issue entirely.
I guess I don't know why you have a leg to stand on when you whine about people who are wealthy.
I think this will be a great investment.
But I don't have the money.
Erlang Developer and podcaster
Posted by hurstdawg:
does it go on the market? Its probably going to go up pretty quick in the first hour or so... wouldn't mind riding that wave...
Why couldn't they offer 7 million :-)
67.6 million wouldn't have given
anyone an opportunity to find anything
wrong with it
Criminalize spam and telemarketing!
for a leading global investment banking and securities firm - Gold Sacks & Co.
Chuck
Buy W2k now! Quanities Limited!!
try { do() || do_not(); } catch (JediException err) { yoda(err); }
I imagine e-trade will be slashdotted when those become available :)
FinkPloyd
-Olorin I was in the west that is forgotten
Stock ticker apps on Palm's with wireless connections will probably be everywhere ;)
But seriously, I wonder how much of that stock will just be snapped up by the bigger companies like IBM, Intel, and, unfortunately, M$?
I'd love to get some, but I doubt it'll be possible in the frenzy.
Watch out e-stock brokers, here comes the world.
Well, it's a bit of a gamble if you ask me.
I think we should play a game called 'guess the 10 day price' where we guess the price per share after 10 trading days.
I'll go for $25
-----
If they had stronger quality testing before stuff goes out the door, then RH _might_ be worth it. Any RedHat x.0 release sucks, and bad stuff still happens on a x.1 (like 'man' segfaulting). Their erratum list is just flat too long to trust the system as a whole.
The RedHat 6.0 for Alpha stunk horribly. I did 5 installs before I got everything right. If you tell the installer not to init X windows on boot, it won't work properly, set a default WM, and I couldn't open an xterm to save my life...
I can see the headlines now. "Microsoft launches hostile take over of Red Hat Software..." Let's see, 6 million shares, let's say that after a few weeks they settle at $30/share, that's a market capitalization of $180 million. Microsoft has $14 Billion in cash (from their FY98 Annual Report) and last year alone, they spent $2.5 Billion on R&D. I'd say a small $180 million "investment" in Linux R&D would fit nicely into the Microsoft budget.
Hmmm... I think the quintessential example of the Billionaire becoming richer is everyone's favorite Bill Gates. Don't get me wrong, I don't like Microsoft's business practices or products anymore than most /. readers, but I will say this... Like it or not, Microsoft has made computers accessible to many people who would not otherwise have used them. Why should I care? Well, I can think of at least two reasons: First, the existence of computers in so many homes has allowed companies like Amazon.com, E-Trade, and such to exist. Without any potential market (i.e. in a world without MSized home computer users), they would have no reason to be in business. Granted they aren't making any money at Amazon, but I believe that was covered yesterday... Second, the expanded marketplace for computers drives competition up and prices down. Hence, I don't have to pay as much for my computer which I happily reformat and install RedHat on.
Frankly, I am sick and tired of the tendency for people who attack the rich. I consider myself an "average Joe", happy with my ~$50k salary, but I don't think I'm on some moral high ground because of it. The entrepreneurial spirit (if you want to use the term greed, go ahead) in this country has been a driving force in shaping the country for the better. Hell, Silicon Valley could still be deserted were it not for the gold rush.
A final thought... if you really and truly are happy with your job, your salary, and your life, you wouldn't feel the need to attack others for trying to make themselves happy. They aren't taking anything away from you (and they are probably giving back more to you) by doing so...
The press release says
"After the offering, outstanding common will total 66.6 million shares."
In other words, the IPO is only selling about 10% of the
company. That puts their valuation at >$600m, 90% in the
hands of their current investors.
There is a new article at CNN regarding investing in IPOs and mentions the fact that individual investors do not usually have the opportunity to invest until several days after the IPO when the stock is usually over valued.
/q_ipos/
Check out the article at:
http://cnnfn.com/1999/07/13/investing
~afniv
"Man könnte froh sein, wenn die Luft so rein wäre wie das Bier"
~afniv
"Man könnte froh sein, wenn die Luft so rein wäre wie das Bier"
Richard von Weizs
PHAT is traded, and it belongs to the PHOSPHATE RES PTNRS LP (PLP). Just FYI.
[CptnForq] ummm... what was I talking about?
Any investor in RedHat must realize what it is that made RedHat successful. That means free, and open, software - GPL all the way. Sure, its an unusual business model, but it has worked wonderfully so far and it certainly looks like its going to continue.
I for one will be trying damn hard to get some shares of RHAT as soon as possible.
Yes, usually your broker will penalize you for "flipping", i.e. selling the shares you bought at the IPO price. As a result, they might make it hard for you to get shares at the IPO price again.
I don't understand. I thought the idea was to buy low and sell high. How can a broker penalize you? What's wrong with selling shares? Don't you pay for a trade and they do what you say? As you can see I know nothing about financial things.
>You clearly do not understand that there are two
>kinds of people who have money.
>Those that earned it and those who stole it.
WRONG.
There are at least three kinds: the two you mention, and THOSE WHO INHERIT.
And unfortunately, many who claim to have "earned" their wealth are liars, and have really been born with silver spoons in their mouths, and hide behind loud noises of working hard.
Look at how the rich want to cut the estate tax rate! They pretend to have the abilities to have made their wealth on their own, but if they really believed it they wouldn't try to hoard it all for their offspring. In fact they would let their children prove themselves "worthy" of wealth just like the rest of us are supposed to. But the rich know better than anyone how much priviledge or lack of it can strongly determine what a new generation can accomplish.
What REALLY gets my goat is when they deny this fact by outright blaming the poor for their poverty.
And they also tend to raise children who are lazy, since the children know they will inherit, "So why work?"
It doesn't always happen, but I have seen this too often and am not making it up.
Well, I know that at least the offerers themselves .com businesses, IPOing, selling their
are not to sell within a certain period post-offerrer. This should discourage
people from making silly
stake immediately, and, er, fleeing the shareholders.
The other thing is that you're penalized (in the US) for selling stock
that you haven't held for at least a year, in order to encourage long-term
investment; profits factor as regular income instead of (lower-rate)
capital gains.
say ... this might be silly but if the linux community bought stock wouldn't we have a say over how the company procedes.
E*TRADE has a policy that you have to have made 75 trades during the past year to be on the "preferred list" for IPOs. Have you done this? Just repeating what my dad told me.
Sounds like AMD and the manufacturer of a certain
"organic" shampoo could combine ad campaigns...
;-)
Many people have the impression that RedHat vastly dominates the Linux market. But that is, at best, true for the 'mindshare' side of things.
In real numbers, SuSE is bigger, and may well have even more users. The author of MpegTV, a shareware that comes both with RedHat and SuSE, says he has 30% more registrated SuSE users than RedHat.
This indicates that SuSE might at least have more users who are willing to pay (and those are the only ones that count for business).
Add to that, that SuSE is generally renowned for better quality than RedHat (packaging, reliability, careful setup), and RedHat dominance is not much more than clever marketing...
The above comment is very good. I'm just not a moderator. :)
180 days for officers and exercised options of employees. And if you do the IPO and drop more than a small fraction of your shares, they won't let you in on the next IPO.
Most people would be better off, if they can't get IPO shares, to wait for a few days/months until there is a dip. Probably a multiple of the IPO price (e.g. if $12, then figure $20-$30 range), but cheaper than end of first day ($40?).
If you do make a first day offer, make it a round lot (100 share multiple), and market order, as a limit probably won't exercise in time.
Anything other than a market order probably won't work.
Will in Seattle
who bought some Salon.com at less than the IPO (9 1/2, IPO was 10, but that was a dutch auction)
Will in Seattle
Why do you think people like Alan Cox went to work for RedHat in the first place? Not for the salaries - I remember reading about Rasta (before he quit) making some totally lame salary there - don't remember the exact number, but it was LOW.
But if you're using a retirement account (IRA, Roth IRA, 401(k), 403(b), SIMPLE IRA), and can buy/sell individual securities (e.g. stocks), this does not apply. There are no capital gains.
Will in Seattle
Will in Seattle
On the application forms, did you (honestly) say you make 75 trades a year? Remember, this form gets copied to the SEC, so there's jail time if you lie about your true risk level ;-)
Me, I actually make that many in all the accounts.
Will in Seattle
Will in Seattle
When investing in Redhat you are investing in OSS. You are investing in a philosophy, a change in the way a corporation works. So far, Redhat have been good players in the community, why would an IPO make them any different?
Ben and Jerry's Ice Cream is a similar corporation. They donate 7.5% of their profits to what they consider worthy causes. Does this piss off the stockholders? No, it's an understood that Ben and Jerry's stock is more of a movement than a way to get rich. The stockholders believe in B&J and what they are doing. They show their support for this company by buying stock.
So show your support for opensource and Linux and dump a few bucks into the Stock.
Redhat releases their code under GPL, the onlyreal way to keep investors happy is to have investors that believe in the GPL/Opensource.
Maybe they will even throw a cool annual party for stockholders.
Who (like my family), invest money even when they're not well off, don't spend a lot, make their kids work, and don't wear fancy clothes or do most of the things people think wealthy people should do.
I never fly first class (use my miles for more trips), hate to pay for parking, take the bus, have never bought a watch worth more than $30, only buy clothes on sale, and my only major expense is charitable donations (and some non-tax-exempt political ones).
Which is typical for the majority of millionaires.
Yes, the system is biased in favor of those with wealth. And I don't agree with cutting the estate tax rate, even though it has cost everyone in my family a lot of money, because someone has to pay taxes!
And, in case you wonder, some of us have been very poor in our life as well. Which helps one keep one's moorings. I still have a hard time spending money, unless it's for education.
Will in Seattle
P.S.: Read "The Millionaire Next Door"
Will in Seattle
If you want to find out the folly of the game called the IPO; you should check this out http://www.fool.com/Specials/1999/sp990316AboutIPO s01.htm These people are pretty good at the game... -m0ng00se
Is madness a syptom of genius or vice-versa?
I think you're right on the money. Open at $12, peak above $40, drop to low-20s in a 30-190 day window. Any cash left over from my $150K is going into limits to buy in the low-20s.
Probably won't kick in for a month or so, but still a good investment.
Will in Seattle
Will in Seattle
Waterhouse will let you trade via phone, but it has a higher commision.
As to day tradeing, you're right about it. You might as well go to Los Vegas and shoot craps.
That being said; you don't pay taxes on gains in an IRA. If it is a Roth IRA you pay taxes on what goes in and don't pay anything on what comes out. If it is a "traditional" IRA you pay when you take your money out, but in either you don't pay capital gains, or income taxes on your gains.
Quote.com's IPO resource is interesting, but I wouldn't bet the farm (or not bet) based on their analysis.
I checked out a few Witcapital.com offerings that have been very good to me, and they had lukewarm ratings on Quote (STMP and MLTX if you are curious). They also gave their highest rating to BNBN, which has been a bit of a dog.
Thanks for sharing though, I like to evaluate all the tools I can find out there.
Corel is in a good position once RedHat goes IPO. If RedHat gets at least $30/share on the first day of opening. I'm confident Corel $5/share will skyrocket to $10/share. Corel stock symbol is CORL. Watch for it to grow extremely well.
My two cents.
Sure you might make some money flipping it, but the numbers look pretty scary.
...
Total common is 66.6M (6M being sold). IPO at $10-12. That's a capitalization of $700M or so. $20 would be approx $1.3B
Last years revenues were $10M or so (earnings around zilch), which would put the price/sales at 100. Or looking at it another way, even at a pretty high P/E of 50 they'd have to be earning $20M to justify a $1B market cap...
Bear in mind too that they only dominate in the US. SuSe (which has higher sales than RedHat) dominates in Europe. Pacific HiTech in Japan.. They're also not getting many takers for their service contracts (revenue was practically all sales), and their product can be bought for $1.99 from www.cheapbytes.com (vs $70 or so from RedHat)....
Looks scary to me as anything other than a short term gamble.
I see your point regarding RedHat's revenue, but when has that had any real influence on trendy stocks. I see Red Hat following the trend presented by Yahoo, EBay and Amazon - profits don't matter, its the trendiness that matters. Every IT anaylist on Wall Street may be watching Red Hat with the hopes of it being the next EBay/Amazon. Why? Beacause Linux is trendy. Not necessarily in a mainstream way, but every IT magazine has at least touched on the hype of Linux. Even my father, an old mainframer, is eyeing the Red Hat IPO.
Now I know hype isn't everything in the IPO game, but look at amazon. Their stock soared without the company making a profit. Why? Because the idea was cool. Red Hat may fall in just the same boat. If it can maintain financial stability, not necessarily success, then the hype factor may increase its value alone.
My personal prediction is this: opens at $12 peaks at $45-$60 and after a little while (3 months) drops to $20
Me, I have a couple other trendy stocks I'm watching out for.
--- Linux... a college project gone horribly right
Okay, I admit it. I've never traded stocks. It's because all the places I've seen require at least $1000 to start and I can't part with more than $250 at most. I'm stuck playing along on Yahoo's investment challenge game wishing I could do it for real. Is there any place online that lets you begin with little money and I hope still has small transaction fees? I'm dying to buy some RedHat and MP3.com stocks as soon as I can. I guess maybe you aren't a serious investor until you can spend $10000 on it but hey I'm poor here! :)
:)
Also I hope to see more investment software coming out as free software now. Anybody here tried software by Omega Research? I'd like to duplicate and extend that. Possibly give it a web interface. Would be awesome IMO.
At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
It isn't a good investment. Just like RedHat itself.
They have given nothing to the community because they can't afford to. They've never posted any profit; only losses. Most recently, over $100,000USD of loss. And they have the balls to get a $60mil IPO? EXCUSE ME?
Yes, that's right, $60mil. 6 million times $10 is $60mil USD.
REDHAT IS *NOT* WORTH $60 MILLION DOLLARS!
You know what this IPO is? RedHat's way of getting out of the red.
It's their ticket to easy street. Like many companies. Start up hot Internet company, post large losses, make IPO of over 20 times what you're worth, watch everyone at company get rich on stock options, watch execs retire quickly while cashing in stock options, and watch quality of the product go straight to shit.
Watch the stockholders maneuver the company in the direction they want it to go. Watch the good employees cashing in their stock options because they don't like the new direction the company is going. Watch everything fall apart.
Watch as another Microsoft is formed.
-RISCy Business | Rabid System Administrator and BOFH
your company here.
shelby != ford
I wear ratty blue jeans and drive a used granny car. Nobody would guess that I have any amount of money.
The millionaire next door - the guy with the mongrel dog. What a laugh.
I'm only 1/16 Scottish, is the Scottish influence that powerful?
Anyway, after frustration with their IPO web pages, I poked around and discovered this web page. You need to be a E*TRADE customer to see it. I quote "Red Hat has set aside a certain number of shares in its initial public offering for purchase online through E*TRADE by certain members of the open source community." Another quote, "Red Hat has chosen certain people that the company feels have contributed much to the growth of the company to date. Red Hat wishes to provide these people with the opportunity to purchase shares of stock in the company at the public offering price, should they wish."
Will any of the Chosen Ones speak up? Should the rest of us forget about it?
I mean how many people out there are actually gonna go out and spend $50 on RedHat x.x compared to the number who will dl of the net, or get a cheap CD?
Buisiness will buy it. And, even though they only have to buy one copy, and use that one copy on each of 1000 computers, businesses will still buy 1000 copies, one for each computer.
Why? You got me. But they will, and do. I guess it helps them sleep better at night or something.
And Red Hat is supposed to be targeting business, right?
Also, I was in the bookstore the other day, and ran into a guy that had RedHat6.0 in his hand, for $80, and I said, "You know you can get that for $1.99 at cheapbytes.com. It's the same exact thing" and he said "Yeah, but I need the documentation and phone support"
Come on. Is the support and docs really worth $78?
I bought my first Linux distro at the store, too (but my boss paid for it), so I guess I can't really talk.
People new to Open SOurce are trained to BUY STUFF and PAY FULL PRICE. They like to have the box. Go figure.
-geekd
Red Hat's common stock is devided into 66 million shares. This stock is owned by the company which in turn is owned by the original investers, founder, and some of the employees. The Company Red Hat will sell part of it's self at an initially fixed price. Now this money goes into the companie's bank acount so they can use it to expand etc. Once the company does this, each of it's owners sudenly can sell their portion of the company as common stock on the open exchange. If you owned 10% of Red Hat prior to the IPO you will own 6 million shares which you may now sell (actualy there are a few restrictions by the SEC on the time frame of this). It is the owners of Red Hat who make fortunes and they could not do it without Goldman Sacks (sp?).
counterpoint: It is worth noteing that G.S. has the 2nd highest profit margin of any company in the world after Nintendo.
It can release it's own software under any license it wants.
Microsoft only owns 15% of apple but that's still enough to efectivly control the company.
e.g., Internet Explorer bundled to the MacOS
People,
IPOs of this nature (meaning incredibly hot, as I predict Red Hat's will be) just don't get sold to individual investors, at least not at the IPO price. Typically, large firms like Fidelity get a certain number of shares immediately, and allocate them to their biggest clients. I'd be very surprised if any individual investor (especially a linux user, we don't tend to rake in the big bucks, at least yet) gets any shares at the IPO price.
Keep in mind that the price will shoot up in the first few days and then cool off. After that I see Red Hat as a very viable investment.
Be careful, though.
The question still remains, Long or Short. There will be an initial excitement that will pump up the stock price. But since the open source buisness model is a 'new' concept major investors could be jiddery driving the stock price up and down based upon financial speculations. Everything that Redhat does that week and following IPO will be watched extremely closely.
If Redhat makes a decision that's "Good" for the community but may be "Bad" for profit, stock prices will fall period, that's the way of life. Will RHAT be pressured by investors? I see no reason why they wouldn't be. Who would you listen to if you had millions at steak?
A good idea and a great product help out with things a lot, but take a look at AMD from the long term perspective. They released the K7 (better than sex, P3 killer) and their stock barely moved a couple of dollars. AMD has a great product but has been plagued by business and production problems keeping investors scared.
IMHO RHAT has a kick-ass product (better than sex, Win killer). But their business model must be rock solid inorder to suceed. They've got a tough balancing act to perform here and I really hope they pull it off. But the bottom line is, I'll be buying my shares - long or short I do not know.
The stock will get priced at like $15, but the first trades will be at $60. The people who
got allocated it at $15 will have a 400% profit the first second. Who says rich people don't work hard?
Cool. Bring it on, I say. :) -signed, a New Yorker
...and, where would we be w/o the rich? For
many (not all, but many) -- there are *reasons*
why they are rich, and those reasons encompass
more than luck.
My friend, you're clearly doing it wrong.
OTOH, what do your comments suggest about running RH Linux on an Athlon? A system that cannot legally be used by someone younger than 17?
'nuf said. ;>
I'm certain I want to own RHAT, although I don't know much about how strong their service division is and is going to be, the marketing is certainly there.
I plan to try to get the 100 pre-IPO shares that will be offered to select E*Trade members. I believe E*Offerings is co-underwriting the IPO, and will offer up shares to E*Trade customers on a "lottery" basis.
Chances are though that I can't get that magical "$10-12" price that almost no one get. So do I buy at IPO or wait?
I have been keeping an eye on this in Silicon Investor's site (search for Red Hat) and at Quote.com's IPO Edge.
The IPO Edge analysis might be interesting to anyone considering this IPO. RHAT is given an "unfavorable" (-4) rating (range from -5 to 5). The rating appears to be a combination of metrics about how well the lead underwriter has performed in the past, and similar deals/IPOs. The overall rating is a guess of how strong your investment performs after a year.
In general, it looks like the people who "flip" a Goldman Sachs IPO get an average return of 53%, but if the hold on a year the average is 1%.
I am left wondering, however, the performance of Goldman Sachs-underwritten Internet IPOs.
Thanks for writting that out, I was gonna do a similar post but you explained it nicely ::)
Daytraders rule!!
I just don't understand all the Hype Slashdoters are giving RedHat. I just don't see how the company is going to make money. What is their product? I've seen several possible answers to this question, none of which I particularly like:
1) They will sell linux
How can you sell a product that is avaliable for free? At least how can you sell it for much more than minimal cost (ala CheapBytes.com). I mean how many people out there are actually gonna go out and spend $50 on RedHat x.x compared to the number who will dl of the net, or get a cheap CD?
2) They will sell advertising on a Portal Site
RedHat.com can't get *that* many hits, and even if RedHat Linux becomes hugely popuoar, that doesn't mean it'll get any more than it does now.
3) Service/Support
This is the most popular answer, but I'm still not sure what it means. Is RedHat goning to try to be like LinuxCare? Maybe, but I just don't see that much of a business in answering phone calls all day to help people get the latest version of Mozilla working.
I think Linux is a great OS, but a bad financial investment.
-Harry
well...lets look things as they are now...Amazon claims to be losing millions per year..yer their stock price is in the stratosphere...why??? certainly not because they have a great P/E...people are banking on the future..people are afraid they will miss an opportunity to buy *coke* or *GE* at ground zero. It's the same with RedHat. These are different times...It's fear...hype...momentum...etc..not always the bottomline.
:)
Who's to say if this will be a good long term stock? I certailny don't have the wisdom to make that call. But I think it's as good as anything else out there. If RedHat takes the money and really cranks out some amazing stuff then they will make money, and the stock will be a good long term investment.
OTOH..if Linux burns out..or RedHat falls from grace...then poof...you loose. So buy into the hype...roll the dice and live large
well said!
OK, so the x.0 releases are more buggy than perhaps they should be. That's probably a result of RH's policy of trying to jump on the latest stuff ASAP. They were a major force in pushing Linux into libc6...if that means a little instability, it's "release early/often"...I still use 5.2 on my servers, because I see no reason to upgrade the whole disto, only the packages I need. People who need stability will always wait to adopt the newsest version, no matter what OS or software you're using.
As for RH6.0 Alpha, I've had no problems whatsoever...which is good, because the floppy on my Multia is broken, and I can't attach >1 SCSI device to this particular configuration, so I have to take out my hard disk for a new install (and put it in another Multia). I've installed it only once, and it behaved exactly how I expected it to--I'm currently using it as an Xterminal to run KDE on the main (5.2) server, but it has no problem running AfterStep on its own; I just set it up and it worked, same old Redhat.
I used Debian the other day (some 68k Mac installs), and 2 things occurred to me:
1) Hey, this is nice and small.
2) This isn't as easy
Of course, the 2 go hand-in-hand, as those nice GUI RedHat tools certainly take up a bit of disk space. But, every time they auto-detect my video/network cards and practically set them up for me, it's quite nice. Which happens most of the time. Editing text files is fun and all, but when you've got lots of new machines to setup, no staff, and more important things to spend time on, it's very welcome.
Just look at it like this...(it's simple): The golden rule of investment without regret is to invest your money in products and companies that you A) enjoy or B) believe in.
Do not make it as complicated as the Wall Street broker-types would like you to believe it is.
If you are in it just for the dough...THEN it gets complicated, because you have no gut feeling to go on, just data presented and the proverbial 'word on da street'
So the question remains: Do you believe or revel in Red Hat enough to make the decision of investment in them a non-issue? Yes? then *DO* it (no matter whether or not you're pissed off about not getting in on the IPO)
In short: Get behind those people who make your life fun.
Is madness a syptom of genius or vice-versa?
I'm wondering about the pronunciation. Is it
(or, will it be) AR-HAT, ur-HAT, or (silent "h")
RAT? I prefer the lattermost, mainly because it
is monosyllabic and ends in a hard consonant (like
a lot of "effective" expletives).
Just look at it like this...(it's simple): The golden rule of investment without regret is to invest your money in products and companies that you A) enjoy or B) believe in.
Do not make it as complicated as the Wall Street broker-types would like you to believe it is.
If you are in it just for the dough...THEN it gets complicated, because you have no gut feeling to go on, just data presented and the proverbial 'word on da street'
So the question remains: Do you believe or revel in Red Hat enough to make the decision of investment in them a non-issue? Yes? then *DO* it (no matter whether or not you're pissed off about not getting in on the IPO)
In short: Get behind those people who make your life fun.
-Chuck G.
Is madness a syptom of genius or vice-versa?
Snap up about $4,000 worth as soon as I can on IPO day. I'll be ready at my Datek account at 6:30AM PDT.
Put in a limit order to sell it at double what I pay for it. Goes through in a couple days. Maybe a week.
Rush off to buy a NICE new computer with my $4K profit.
Wait until stock goes back down to about 50% above IPO price. Buy. Hold long term.
I know because the family broker at Morgan Stanley Dean Witter was concerned that we might be lucky to get 100 shares in that account (we're down for up to $100,000 if they can get it) and mentioned the three underwriters, of which is E*Trade is the only one most slashdotters could access.
So, I cut a check for $50,000+ to them a couple of weeks ago. I'll see how much I can get. Might have a chance, as my account size is twice their average and I already trade more than 75 times a year.
Strange as it sounds, I do long-term investments.
Will in Seattle
Will in Seattle
This IPO gives out about $60M in stock. It gives out about 10% of the total stock. From this we can deduce that Red Hat is supposed to be worth about $600M.
My previous estimates for what Red Hat would be worth came to an amount of about $20M - $60M for the whole company.
So my opinion is that the stock is highly overrated.
Now the stock value can reflect an "expectation" value, and if the "doubling every year" (which they claim on their website) continues, any price is reasonable on the long run.
Anyway, I don't deal at stock markets. I don't buy stock. I just calculate total-company-value for fun. Just ignore me.
Roger.
At least, not until it has gone up the amount it will go. Goldman-sachs is underwriting the IPO and of course that means its favored investors will have the lionshare of stock.
I love our capitalist plutocracy
Netscape-Enterprise/2.01-p100 on Solaris, for the front door anyway
Chuck
Fortune cookie # 847298374
try { do() || do_not(); } catch (JediException err) { yoda(err); }
It says IPO shares will be made available to, among others, friends of Red Hat.
:-)
I'm a friend, really I am! Can I get some please?
Ooh, a sarcasm detector. Oh, that's a real useful invention.
Sure the share price will rise in the short term amid the traditional hi-tech IPO frenzy, particularly with all the open source media attention. But I wouldn't be surpised to see it dropping down towards the issue price in the medium to long term. Good for those looking to make a quick buck, but I wouldn't view it as a long term investment...
"The invisible and the non-existent look very much alike." -- Delos B. McKown
I'm in.
I sent my check in to E*TRADE yesterday to open an account, and I'll soon send some additional cash to make sure I get this IPO, even if it prices above the $12 high end of the range (unlikely). Based on past credentials, E*TRADE investors can get 100 shares of an upcoming IPO when it prices.
As for Red Hat being a long-term investment, I firmly believe that they can last. Everyone here is always talking about (1) how fast Linux is growing, and (2) how Red Hat is becoming the Microsoft of Linux. If this second point is true, then as an investor I'm all for it! Microsoft's stock has skyrocketed in a long term view.
I figure, why not profit from Linux's rise to power? I'm putting my money where my mouth is as soon as I get account-opening confirmation from E*TRADE. I just hope I can get my 100 shares.
For more information, click here.
skill? ambition? drive to succeed? willingness to
take risks?
Most average Joes might be very happy w/
$50K, anyway -- fine. They don't have to do more, or to
try starting their own biz. Fine. That doesn't make 'em more
virtuous than somebody who _isn't_ satisfied with that, and
wants to build a thriving biz he can call his own...
Free shares for significant Linux contributors would be a Very Good Thing (and no, I'm not one myself - wish I was).
HH
date; talk; touch; unzip; finger; expand; strip; mount; yes; yes; yes; eject; more; sleep
Yellow tigers crouched in jungles in her dark eyes.
She's just dressing, goodbye windows, tired starlings.
Bad move. By the time you are allowed your order the stock will already be bloated and it's value will only be going downward soon.
Amazon.com anyone? The ONLY reason I didn't buy Amazon right after the IPO is because I was worried about competitors like Barnes&Noble kicking their butts.
Slaping self over the head,
Micah
And I don't agree with cutting the estate tax rate, even though it has cost everyone in my family a lot of money, because someone has to pay taxes!
I'm very confused by this statement. Why does someone have to pay the taxes. Frankly, I think we pay enough in taxes in this country. And most of it just goes to waste, padding the wallets of lawmakers, employees in overstaffed government offices, and contractors who fleece the government at every opportunity, because they can get away with it.
Contrary to what all the naysayers would have you believe, cutting taxes does work!! Cutting estate taxes would encourage wealth creation and investment, behaviors which benefit the economy as a whole and improve the lives of everyone in this country. If I know that my estate is going to be eaten up in taxes when I die, what incentive do I have to continue working and earning money after I have enough money to live out the rest of my life? And can someone tell me why the government should have the first piece of my estate if I choose to leave it to my children? I earned that money and I paid taxes on it already. I should be able to give it to whomever I want and I'm sorry if my family comes before the government on my priority list.
Just not many. 91% will still be held by the initial investors and other shareholders (directors, employees with options, friends who own hat making stores, etc.).
Will in Seattle
Will in Seattle
Cause my son only gets Scottish ancestry on his dad's side.
Will in Seattle
Will in Seattle
Seriously, during the Reagan years, the whole coutnry ran up everything on credit. Almost bankrupted the country with useless trinkits for the rich.
Now the current GOP crop wants to "give back" $1 billion, instead of paying off the national debt or funding the programs for all the old fogies.
Sheesh!
Look, try living in another country and you'll NEVER say that we have high taxes. We have one of the lowest tax rates in the world, and you should be darn grateful to pay your taxes.
Will in Seattle
Will in Seattle
OK, some is for my son, for each day in the summer he does his homework perfectly (1 share/day), but the rest is for me.
Pikachu, I choose you!
90 million Japanese gameboys can't be wrong.
Will in Seattle
Will in Seattle
I follow the Motley Fools myself, and agree with most of what they say. Especially their take on debt and investing (first pay off your credit cards), retirement accounts (max them out), and many other things.
... (apologies to George Whitey Bush)
I just happen to think that this is one of those rare IPOs that I can see lasting for a while, in a company I understand, and in an industry I understand.
Caveat Emptor!
Will in Seattle
P.S.: If you don't speak Latin, you must not be Latin
Will in Seattle
Ponder this....
As of July, 18, at 3 pm, there were 29,000 votes on the latest poll. Now, if everyone invested a measley $1000 for everytime they voted in the last poll, all of the people that voted on slasdot, would OWN half of Red Hat. Half is all you need to be the decision maker. I want to make another statement too, I'm investing $1000 in Microsoft, until Red Hat goes public, then all of the money I can scrape together is going to Red Hat, I'll see you when I'm rich.
Like distributed.net's setup, we must WORK together. In my opinion, it doesn't seem that difficult, if people had INITIAVE. I don't know how many people are going to end up reading this, becuase it was posted when this article was taken out of the limelight, but if enough people notice that I just MAY have a good idea here, this reply will hopefully be placed somewhere where many people will see it.
Sleep on it, and think about it. Unity is what COULD make it happen, then think about it, this highly unexpected mass purchase would drive the stock price way up, we all get rich, we invest in more Linux-related (friendly) companies, and one by one Linux technologies will become so popular companies like Microsoft will have no choice but to close their doors, and then, Bill Gates will see that Linux companies are the ones making money, he'll invest that $100 billion that he has just obtained (well nearly 100 billion, and I say that on channel 274 on directv [the investment channel], that Microsoft will annouce on Monday $500 billion in earnings) and that money will be put to good use!
I'm interested, just wondering which internet stock trading system is the most preferred??
A couple of problems with E*Tard:
1) You have to make your indication of intrest online during the two hour window when they open it up. There will be no advance warning of when this two hour window is, usually 4:30-6:30pm EST, but they never tell you what day.
2) Even if you do get your IOI in, then it is a lottery. So far, the evidence is that it is not a true lottery, but rather they pick a random time during the two hour window and start handing out lots of 100 shares to each person who IOI'ed at that point and following, so if you IOI to early you got zero chance, but if you IOI too late, you've got an almost zero chance.
IPO's through E*Tard are just another way to get more people to open accounts, so their SEC filings will look good. They do very little for the common.
A couple of problems with E*Tard:
1) You have to make your indication of intrest online during the two hour window when they open it up. There will be no advance warning of when this two hour window is, usually 4:30-6:30pm EST, but they never tell you what day.
2) Even if you do get your IOI in, then it is a lottery. So far, the evidence is that it is not a true lottery, but rather they pick a random time during the two hour window and start handing out lots of 100 shares to each person who IOI'ed at that point and following, so if you IOI to early you got zero chance, but if you IOI too late, you've got an almost zero chance.
IPO's through E*Tard are just another way to get more people to open accounts, so their SEC filings will look good. They do very little for the common man.
Note that the ticker symbol is one small penstroke erasure away from being PHAT. I can see the headlines now: "RHAT's phat IPO" (As far as I can tell, no-one actually has ticker symbol "PHAT" either...)
-=-=-=-=-=-=-=-=-=-=-=-=-= John Reinert Nash -=-=-=-=-=-=-=-=-=-=-=-=-=