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.

Comments

"Why I Ph33r The IPO"

[cswiii]

In just a few short weeks, Redhat Software will release its IPO, as it begins its wild ride on Wall Street. The controversy over this,
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.

But is it a good investment?

[Tet]

Don't get me wrong, I've been using Red Hat for years, and think they're a great company. However, that doesn't necessarily make them a good investment. They can't make huge amounts of money from selling the OS, so they need to have other sources of income. IMHO, they've missed the boat a bit on the support side. People are going to get support from LinuxCare, Compaq or HP -- not Red Hat. So that leaves little other than their "portal" site to bring in revenue.

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...