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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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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
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
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
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.
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.
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
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.
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.
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
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.
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.
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?
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
It'll open at a huge premium for sure. A lot of people will buy it just to ride the first 10 days inflated price. The only way that ordinary people will get in on the IPO itself is if they offer it via mail or electronic means. I got in on a few IPO's while I was an undergrad this way... mail them a cheque for 500 bucks and you get 40some shares. It doesn't look like they're doing this though.