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Red Hat IPO Price Range Increase
saurus wrote in to tell us that an announcement has appearedon E*trade proclaiming that the IPO share price for Red Hat will now
be $12-$14. Everyone's getting really anxious to see what happens.
Brace yourself. Update: 08/11 12:32 by H : It looks like the info was pulled-anyone have more details? Post below.
Be, Inc. is down to $6.00 - it's IPO price. It doesn't appear that it -can- fall any further, it's just been sliding along at the same price, for several days now.
MP3.com's shares are still falling. I doubt they'll recover any time soon, it seems like a fairly terminal plunge to me, losing several dollars a day, every day.
Other tech shares are either being postponed, are out this week after being postponed, or just doing miserably all round. From what I can gather, that is true (to some extent) of the stock market as a whole.
If Red Hat does well this week, I would be amazed. Mind you, if it -DOES- do well this week, shareholders are likely to treat it like gold dust. If Red Hat can be one of the few tech stocks to buck the trend, expect to see them fly through the roof.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
I don't think Be's price -can- drop any lower. On the charts, it shows Be's price diving, then suddenly flattening, as if it'd hit some kind of pre-set floor. Since then, it's been sliding along the floor, with the occasional blip up followed by a drop back. The earning report can show a loss of a trillion, and the share value wouldn't flinch. There's nowhere for it to go.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
All I can say is I wish you luck, and luck to all the rest of the Red Hat investors. Personally, I think you'll need all the luck you can get, but then Red Hat might strike gold, too. That's just it - you don't know. But I do hope it goes well for you, for all my concerns.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
Doesn't necessarily mean it's the best thing to invest in. Certainly, the current share prices are rock-bottom. I'd only invest in Be if: (a) they promoted their products, for a change, (b) at least one major manufacturer invested in it, and (c) we see at least one store with BeOS on the shelves.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
IANAFA (I Am Not A Financial Advisor), but my understanding is that this practice is derisively known as "flipping" and is a good way to guarantee that you will have a much more difficult time getting in on future IPOs.
You're right that flipping is frowned upon, but it shouldn't be. You'd think there would be at least one person on Wall Street conversant with supply and demand...
The "bubble" phenomenon you see with hot IPOs would be *reduced* if flipping was encouraged. For every single person who watches a stock's rise and tries to sell when that rise slows, their sale itself acts to brake the excessive rise of the stock price.
If every IPO was aggressively watched by people waiting to dump their stock the moment it went up too unrealistically, well, it wouldn't go up unrealistically at all.
"Now this?" Um... I'm not certain that an initial price increase is a good thing even for people who got "the letter" - sure, maybe it means that there's more hype, but it also means that even those who got "the letter" have to pay 20% more for each share to take advantage of the offer...
Damn, wish I had $30 grand to gamble on Red Hat. I was thinking... even if it goes up fivefold, I still can't retire. :-)
... at the IPO phone number, 1-888-707-8680 ext 4263. Don't bother with the main IPO phone number.
The first time, I talked to a helpful man who transferred me to a very helpful rep who modified my limit order to $14.25 for me. I asked the rep if Red Hat as likely to change the price again, and he said "probably not". Keep in mind that Red Hat, not e*trade, determines this price.
The second time, I realized I had more $$$ in my account and I could actually buy 100 more shares. So I called again, and this time e*trade's rep told me that their computers were currently unavailable, and he would call me back when he could revise the order.
I opened every conversation by stating that I was in Red Hat's Directed Share Program, and I always used the special 6-character account number (the one I get on http://www.etrade.com/redhatipo after I log in).
Anyone who has a limit order in for less than $14, you might want to call e*trade and revise it.
Philosophical arguments aside, it seems pretty unlikely that any of us mere mortals (i.e. E*Traders) will be going into early retirement off the RHAT IPO tomorrow, even if the stock comes out like gangbusters.
A broker at E*Trade just explained the allocation procedure to me:
First, assuming you made it past the qualification questionnaire and put in a conditional offer, E*Trade reviews you for eligibility, namely that you have enough money in your account to cover however many shares you say you want.
Then E*Trade allocates 100 shares to everyone who's eligible -- if E*Trade has enough to go around. If not, the allocation is done randomly, i.e. lottery.
If there happen to be shares left over after the first round of allocations, the process is repeated until the shares are gone. But this broker says "it's very rare" that there are enough shares to give even 100 to everyone who wants some.
IOW, no matter how many shares you put in for, if you get 100 shares you'd be lucky.
I'd note that this comports with E*Trade's stated philosophy of getting IPO shares into the hands of as many desiring E*Trade customers as possible over time. It also comports with E*Trade's need to make as many $19.95 commissions as possible in any deal.
Freedom's just another word for nothing left Zulus
>I would sell mine initially.
I would suggest that this is not in the best interest of the investor, RedHat or the "Linux/GNU/OpenSource/whatever" community.
1) If you are one of the lucky few who get in on the IPO, you would really be doing yourself a disservice to dump it on the first day since the immediate money you could make is far less than the potential return 10 years down the road if it takes off. Imagine how you will feel in 10 years if the value is 10x what you paid tomorrow and you sold it on the first day for a 20% gain.
2) If anyone really cares about success of this IPO, 'flipping' is not how you help. Buying the shares and watching the price and then buying some more later is good. Dumping your stock the day you buy it does not contribute to the stability of the stock. RedHat and E-Trade want the stock to appreciate in value gradually over time, not swing windly up then crash to the floor.
3) Instability in the market for open-source company IPO's will not help the compaines like VA that will go public in the future. If RedHat looks like a nightmare, the terms for future IPO could be less favorable.
I am not a financial advisor, nor am I a wildly successful day-trader. These are my opinions. Sure, I'd like to make a quick buck as much as anybody. I'd like to make a lot more bucks over the long-haul and see the companies I like become successful in the industry, which - like it or not - sometimes depends on their track record in the market.
Don't think of the stock market as a place where experts decide the appropriate price for stocks. Think of it as more like Family Feud, as in "Name the 7 continents--top 10 answers on the board!" You have to figure out what some fucking idiot thinks is a continent. Arctica? The stock market is more like a place where people with money try to outguess other people's moves, however stupid, and beat them to it. Few of these people know what slashdot readers know about Linux, open source, etc.
Internet stocks are slumping right now, because that's the buzz that's going around the lemming herd of stock brokers. For now. Next month Tom Cruise will be wearing a red hat on Entertainment Tonight, and everyone will run out and buy rhat shares, or Bill Clinton will be overheard talking about open sores on his privates, and someone will think that he is holding open source stock in his private portfolio, and away we go!
You're smarter than average, right? You think that Red Hat is a good company, right? You think that open source software is where the future is heading, right? Put your money where your mouth is and buy shares in rhat, beos, etc., then hold onto them until you retire. I'm 29 years old, so the worst case scenario for me is retiring in 36 years. Just about every stock is going up sometime in the next 36 years, so I'm picking cool ones. What about you?
Mike van Lammeren
It will challenge your head, your brain, and your mind.
There are over 40 IPO's slated to come out this week alone. There were 30 last week. Many analysts have ventured that this huge slur of initial and public offerings is partly to blame for the recent poor performance of internet (which leads to tech, which leads to the rest of the market) stocks.
I think this is a bad time for Redhat to be coming out... they are going to be (unfairly) grouped with all the countless "dot" coms that are coming, and I am afraid it may fair poorly.
You really can't get
adequate diversification buying single stocks if you only have a few thousand dollars to invest.
I would argue that you can. Many companies are like mutual funds in themselves. Take companies like Clorox, Procter & Gamble, Philip Morris, Coca Cola, Disney, G.E., IBM and AT&T.
The amount of diversification within these companies is staggering... plus, the majority of them have huge operations overseas, meaning you get the benefits of a foreign fund as well!
For instance, everyone knows Philip Morris makes cigarretes (which include Marlboro, Benson & Hedges, Virginia Slims, Merit, Parliament, L&M, Chesterfield, Lark and Basic to name a few), but did you also know that Philip Morris owns:
Coffees (Maxim, Maxwell House, Sanka, and various Starbucks brands)
Soft Drinks (Capri Sun, Country Time, Chrystal Lite, Kool-Aid and Tang)
Post Cereals
Condiments & Sauces (such as Bull's Eye Barbecue and Miracle Whip)
Altoids, Jell-O, Shake N' Bake, Minute Rice, Toblerone, Stove Top Stuffing, Loius Rich Meat,
Claussen pickles
Oscar Mayer
Kraft Foods
Numerous cheeses (Philadelphia, Velveeta, Cracker Barrel, Di Giorno)
Pizza (Di Giorno's, Tombstone and Jack's)
Oh, and they also own some beers you might know (Miller brewing company, Foster's, Molson, Red Dog, Icehouse, Mickey's, Olde English, Meister Brau, Leinenkugals, Celis, Shipyard, Sharps and Magnum)
Have i made my point? because I could go on...
Plus, with individual stocks, you do not have to pay the year to year fees, on top of year to year capital gains taxes.