Slashdot Mirror
Feature: After the Red Hat IPO Ball is Over
Nothing Succeeds Like Success
by Jay Roseman and Frederick Berenstein
New York, NY - Five years ago, if you asked a Linux hacker if he thought a Linux company would have a market valuation of $5.6 billion by 1999, he probably would have said, "Yeah, right". His pessimistic outlook would not have been because he didn't think Linux had what it took, because everyone within the community knew of Linux's potential value, but because with Linux making money was not the great motivator - lack of money was.
And so, what five years ago might have seemed like an absurdity - here we are. Wall Street, meet the Linux Community - Linux Community, meet Wall Street.
Bob Young and his team have done something that many in the Linux community thought impossible several years ago. And we're not just talking about Red Hat's IPO. There is much more to this story than an IPO.
When any company goes public at $14 and trades within three days over $90 per share, it isn't just Wall Street that notices - everyone does!
IPOs occur every day, so what's so special about Red Hat? Answer: this is a Linux IPO, and it's the only play of its type in the financial markets. So naturally, all arrows point one way. The Linux phenomenon has just begun, and we can expect it to continue.
We should all thank Red Hat for pioneering Wall Street. There was a time when being a pioneer often meant being scalped. On Wall Street being scalped is not taken literarily, although scalpings of a different sort occur daily. Not so with Red Hat, Wall Streets newest sweetheart. As individuals and institutions clamored to own a piece of the first Linux software company to go public, hackers and computer enthusiasts in San Jose acknowledged Red Hat's meteoric rise with a sense of satisfaction. Wall Street has finally discovered what every nerd has known for the past five years: that Linux not only works - it works better!
The fact that Red Hat has shot out of the box quicker than Seattle Slew has been a boon to the Linux community (especially if you are lucky enough to own it), but the real benefit of Red Hat's success is that the entire investment world is saying, "Wow!" What's good about "wow"? Well, on Wall Street "wow' translates to "Holy Cow!" and we all know that "Holy Cow!" means, "Linux is now the worlds domain".
No longer is Linux destined to be the operating system of the knowledgeable few that appear to have this uncanny ability to decipher the secrets of the universe. Or at least it appears that way to middle Americans who only recently unraveled the secrets of programming their VCR. Whether the community likes it or not, Linux has been catapulted into Middle America, and the rest of us will just have to hold our ears as well-meaning Wall Street types pronounce Linux as "linex" and saunter around their offices smirking if it was they who just discovered this "extraordinary new operating system."
The Linux community may not know it, but Linux is now caught in a turbulence that is pulling it into the stratosphere. Whether or not this is a good thing depends on who you talk to. There are those within the community who feel anything that Linux has to do with Wall Street is a parasitic relationship. But it doesn't have to be that way. If we honor the GPL and don't all turn into pigs, it is possible and even advantageous to engage in a symbiotic relationship.
What we have to do is make sure that Linux companies don't take to the skies while the hackers who set the groundwork are left sitting on the sidelines with binoculars in their hands.
When Wall Street grants its blessing, as it has with Red Hat, the entire world notices. In normal business circles Red Hat's performance is cause for celebratory cocktail parties, but somehow cocktail parties and Linux don't seem to mix. Surprisingly, most hackers we have met seem to look at Red Hat and its success with an internal sense of satisfaction, thinking, "I am part of that even if I don't get any monetary benefit from it."
That is what drew us to Linux. It wasn't the prospect of money. When we walked into the San Jose Convention Center last March, which was the first time we attended a Linux conference, it felt like we were meeting an Underdog team that had just won the high-school championship. Missing were the smirks of "I told you so". What we found instead was a community, in the truest sense of the word.
Besides the excitement of the San Jose celebration, we were mesmerized by the $150,000 IBM Beowulf cluster that trounced the performance of a $5.5 million dollar Cray supercomputer using an "off the shelf" Linux distribution. When the challenge was over, and Linux was the victor, the cheers shook the San Jose Convention Center and we got goose bumps watching. At the time, we weren't quite sure what we were watching, but we were swept up in the enthusiasm and found ourselves cheering along with everyone else. What we did know was that this was the cumulation of thousands of programmers making a difference, and proud of it.
We remember the first time we listened to Bob Young saying how he would speak to venture capitalists and explain to them his idea of packaging an operating system that would challenge UNIX and Microsoft and be free to anyone that wanted to download it off the web. We assure you, the venture capitalists may not have laughed in Bob's presence, but that was only out of pity for a man that they thought had gone sorely astray. Who would have thought at that time that Linux would have such an impact?
Some analysts still aren't convinced about Linux's ability to challenge Microsoft. But Red Hat doesn't have to challenge Microsoft; they just have to continue doing what they're doing. (Microsoft, pay attention here!) The Linux community discovered a long time ago that the challenge is with themselves, not Microsoft. Linux doesn't have to knock Microsoft out of the market. It just has to take a larger position in the market. And it has.
This is Linux's honeymoon period with Wall Street. In time, there will be analysts writing Linux's epitaph in their research reports. Linux will be compared to Microsoft in P/E ratios and every other ratio and multiple out there and the truth is that Linux just won't measure up. But analysts haven't yet realized the importance of the "Synergy Ratio." (i.e. one Linux programmer = 50 Microsoft programmers.) They don't realize that there's a community here unlike any they have ever experienced. Imagine the Chairman of Ford putting his arm around the shoulder of the Chairman of General Motors and saying, "great job!" This just doesn't happen in normal business, but it does happen in the Linux community every day.
Wall Street has learned a lot from Red Hat, and it isn't just that Linux may very well be the best operating system going. They've learned that a group of determined hackers could get the world's attention just by doing the right thing. Wake up, Wall Street. Linux has only just begun!
And to the nay-sayers, well, the Linux Community has made it a habit of forcing nay-sayers to eat their hats. Only this time what's getting eaten is Linux's own Red Hat.
--------------------
IPOs: More Than Meets the Eye
by an anonymous insider
After the dust has settled and Red Hat emerges from their quiet period they should offer a new training course in Durham: "Linux IPO 101 - A case study."
From what I know of Red Hat and the folks calling the shots, the various blunders and snafus related to the affinity offer and E*Trade were just that, blunders and snafus. These folks have been around the community far too long to allow something like this to transpire if they had any control over matters.
I have a feeling there were a lot of late-night calls trying to make sure that deserving people got a fair shot at shares. I'm also sure that no matter how hard they worked, some folks slipped through the cracks, and that is unfortunate. Let's not lose sight of the fact that they were sincerely trying to do the right thing.
Bob Young collaberated on the first few issues of Linux Journal with Phil Hughes (which partially explains the difficulty in scoring back-issues for #1,2 and 3). Then Marc Ewing hooked up with Bob and they hired a couple of guys fresh out of NC State and started working full-time on a Linux distribution before almost anyone else. There were others at the time (WGS was around, Caldera was coming on the scene, and Pat Volkerding was working on Slackware) but these guys were out there on the bleeding edge. They've always released everything under the GPL or a similar license and provided support to a variety of community projects.
When no one else thought enough to have a Linux-centric conference or show these were the people making sure Linux Expo came together. Donnie Barnes started Linux Expo when he was a student at NC State and Red Hat kept it alive when the NCSU LUG couldn't. Erik Troan was a SunSite maintainer on top of his regular work. These are people who are true believers in the community.
Hopefully other companies who go public can learn from what Red Hat has suffered through. I doubt anyone can get it perfect, there are just too many variables involved. But we can always hope.
For better or worse Linux has made it to Wall Street. Here's hoping it's for the better.
--------------------
The Wider Implications
by Robin "roblimo" Miller
I believe we are watching the beginning of a Linux-induced revolution in corporate finance that may be more important than recent Linux-induced changes in the way software is developed and distributed. Why more important? Because this revolution has the potential power to change all business activity, not just businesses directly involved with computers.
Suddenly the phrase "World Domination" takes on a whole new meaning, doesn't it?
Well I would guess a little of both. It is of course overvalued, so it will take a while for it to find its natural price. Of course everybody doesn't care that it went from 14 to whatever it settles at, they just care that it went from 85 to whatever it settles at... pessimists. they always muck everything up. I mean, if it ends up at 40, that's still great.
RedHat can spend money packaging, promoting and selling Linux, but if people can download the package for free, and buy the manual and support from somewhere else (where they don't have to pay the overhead of packaging and promotion), where is the money for RedHat?
In short, why buy support from RedHat when LinuxCare probably has cheaper support?
Dionysus
As a matter of fact I am going to propose that (limiting or eliminating free downloads) at the next shareholders meeting. Why give it away? We (stockholders) now has an OS that is much in demand. We should take advantage and maximize profits as much as possible. It is the company's obligation to do this.
You just made a few people VERY rich! I hope you got your piece.
Wow, I remember hearing that you can get FREE SUPPORT for Linux all over the Internet. As a matter of fact that was a main argument in the Windows/Linux wars. Funny how the tables have turned.
Your conclusion is right, but for the wrong reasons. The goal isn't to have Linux be a success, but to have a free OS be a success. If Linux becomes successful, but becomes Windows in the process, we all lose. Ever read Orwell's Animal Farm? We don't want that effect. We cannot let the core OS become proprietized. On the other hand, Red Hat isn't going to proprietize Linux. Everything they do is GPL. If they tried, they'd lose most of their developers, support staff, marketshare, etc. The real threat is that of an already proprietary distribution (SuSE, Caldera, TurboLinux, etc.) beating Red Hat.
The only name I noticed on that wealth page was Bob Young. Who are the other ones. That guy that is worth 15,000,000,000 and some change. Just wanted to know, I am just afraid if anyone gets more control then Young RH might go down the tubes. Young is for the community are the other ones for us too? mac
The problem, or potential problem, is that now that Redhat is a publicly owned company they are required by law to do whatever is in the best interests of the stockholders. If that means closing things down as much as possible they may be required to do it.
Unfortunately, the speculators have driven the price up to very risky levels. Anyone who buys the stock at $70 could easily find it worth $35 in a month. For an average investor (as opposed to trader), it would have been far better if RedHat had had a unremarkable IPO and the stock had stayed closer to the initial price.
The dust is *far* from settling on Redhat... jeez.. it's only been a week. Wait a couple months.. till they report earnings a few times..
You're thinking short term. In the long term, if Linux is proprietized, it'll likely become more buggy, just like most other proprietary programs.
Personally, I don't care about what Red Hat will do with it's software in the future or how Wall Street will be effected by the Red Hat IPO. I know that it went from $14 to at the writing of this message, $70.75. If I had gotten the sacred IPO offer, I would have put $2000 in this and probably sold it at $80 per share which roughly gives a profit of 575%, so that would turn my $2000 into just under $11,500 to by myself my own car which I have been pining over it for years, but I'll just have to go back to the old fashioned way of getting money, earning it.
Redhat doesn't derive any value from the community! Because the distribution is practically free, all of Redhat's market value comes from the expected name recognition.
So the Redhat wealth monitor couldn't be more wrong. The programmers gave their code away for free. That's it! By giving some stocks to the community, Redhat is just preventing that some idiots like the wealth monitor people can claim that Redhat sucks blood from the community. Yeah, greedy people in the community can be jealous of Redhat's success, but they are no real GPL-people. Did they expect to earn something by giving their code away for free? If they did, they were idiots to begin with. Or perhaps they didn't give any code at all.
The situation can be compared to gift giving. Some people give gifts in the hope for getting something back, but that is not a real gift. That is barter. GPL is no barter! If you didn't know that, you were an idiot.
>maybe redhat should think about buying SGI, then.
Nah, they want to stay out of hardware. VA Linux Systems,
however, after *their* upcoming IPO...
Okay, you set your site up as being devoted to to Linux, about how much money there is to be made with it, etc, and you decide to create your page with MS's Front Page. .com whatever that said they wanted to be a "controlling body" of linux standards and ended up using front page as well?
I don't mind someone using windows when they need to (I still need to use Dreamweaver, because it kicks so much booty), but to make a site about linux using a (tremendously inferior and all around sucky) program like front page to do it is just patently _wrong_.
Wasn't it linuxstandards.org
actually, 6,000,000 million shares (10%) are now in public hands. 800,000 was the number reserved for 'friends and family'. In any event RH insiders have a firm grasp on the voting shares and direction of the company. So long as they remain reliant on hackers for upgrades to their product, they can't start charging. Besides, RH doesn't sell Linux they sell support and manuals.
You are confusing the egg and the chicken. Linux works well exactly because of the GPL. 100,090 coders can't be wrong, at least not for very long. Without the GPL you lose that.
$72 to $6 sounds about right.
5.5 billion dollars for a company that didn't even post a profit the last two quarters. Hold onto your stock, but expect it to fall to something more close to what you bought it at. If everyone sells, it will just drop. Who's offering the shares that are currently on the floor?
If he wasn't just GIVEN shares by Redhat out of respect for what he started, then it's really a shame...
I expect the stock to level out well below $50/share (based on value of company and emotional attachment to stock by affinity program members), and when that happens I will add it to my 401K tax-defered account and hold on to RHAT.
I look at it this way, I took $5,000 and turned it into a years tuition at Graduate School, and I have 200 shares to handle the tax consequences.
I am happy with the IPO, glad Red Hat included me, and I will happily pay 31% tax on this income. As much as I dislike 31% tax, I do like the 69% I get to keep!
I would like to explain to you the model of spending by big businesses on IT.
In the past the majority of the money was spent on hardware and the rest went to software and support, due mostly to put in the infrastructure that now exists.
More recently software has caught up and outpaced hardware and brought support along for the ride, because the hardware is already there.
In the not so distance future is believed that the majority of money spent by IT deparments will be for support. This is because companies will migrate to different hardware and software slowly but will constantly need support.
So as long as RedHat stays in the support business along with the distro, there is no reason to believe they will have many problems.
In the next century when a new version of MacKay's classic "extraordinary popular delutions and the madness of crowds" is written, Redhat's stock value is given as an example of insane valuation during the internet mania of the 1990's. A company which has a 10^6$ revenue selling something which is free and has a 5*10^9 market value. How much can the stock crash if the general market crashes? 99% ?
In order for it to become mainstream, the average user (read clueless) has to be able to use it with relative ease.
I probably sould have said Rollover IRA - sorry for the confusion.
I gotta be honest: anything that is attached to Sam Ockman sends up red flags for me. . . .
is if a company comes along and concentrates ONLY on support, packaging, etc. and lets RHAT spend all the money on development. the code itself is worth nothing when open sourced. I'd be willing to bet that someday in the future RHAT will make a proprietary installation program (or something similar) to give them an edge.
Caldera arguably has a better product. And Turbolinux has asia wrapped up. And with redhat now one of the most pricey distributions the competition will thrive. So who's next to go public? I hope they offer the same deal to their customers as redhat did (maybe better coordinated).
Anyone have an idea how this money will be spent?
Jello pudding pops for all!
If any cash you have burns a hole in your pocket then paying your taxes early is not necessarily a stupid move. However, bear in mind that you just gave the treasury an 8 month interest-free loan for that money you gave them. If you are disciplined enough to keep your gains in an interest-bearing instrument you will come out slightly ahead.
( I was the unfortunate one in the affinity group who did not get any shares because of E*Trades mistakes, software glitches in my account. Eventually, I did purchase at full-price during the first two days of festivities, sold them all on Monday morning.
Why do I think you are talking to deaf ears? Because my suspicion is that most of us have already sold our shares during the down-turn. Etrade made the affinity 800,000 affinity shares available on Saturday night, the market turned down on Monday morning. I do not imply a cause and affect, but at least the correlation is clear.
I plan to buy some shares later again, some perhaps for investment, and a few as memorabilia.
Beta could hold no more than an hour on a tape, pretty worthless for time shifting. OTOH, VHS could record 3 hours from the git-go, plus it was cheaper, plus it had the same discernable quality.
Torvalds is Swedish. A Finn would have a name like Toivo Leinonen. Finnish names commonly have names with the "nen" suffix. Moilanen. Torvinen. Makinen. Tahtinen. Byykkonen.
First names run to Jorma (as in Kaukonen the guitarist), Heikki, Wilho, Juhanni, and Eino.
Also the Finnish accent has a wonderful lilt, with the first syllable emphasized and the succeeding odd numbered syllables having the lesser emphasis. Linus' accent is Swedish, sounding more like the Encheferizer that parodied the chef on the Muppets.
...wouldnt you want to invest in a company that ONLY provides Linux support? They get all the benefits with none of the cost of actually DEVELOPING software. As I have said before, this is one of the fatal flaws of OSS. The people who are MAKING MONEY OFF OF OSS are NOT the same people who are writing the software.
Ask yourself this too: If a company made most of its money of off support for a software product, wouldn't it BEHOOVE that company to create software that needed support in order to work correctly? What is the incentive to create software that is easy to use and set up?
See why OSS makes only a FEW rich!
http://www.geocities.com/SiliconValley/Ridge/6617/
does the word hypocrite mean anything to you...what is OSS but someone else's work...so of course steal it manipulate it so it is not compatible, make a fortune raping users, then go to lunch with Bill Gates.....sounds like what we should be seeing soon. I have removed RH linux and moved to another nameless flavor, and I have done the same to the 20 or so servers we were running at work. All of the RH stuff should be replaced with truly OSS systems by the end of the week. If i was a contributor to the OSS movement and then had to buy my own work back i tell you I would be mighty upset and vocal about such tactics......Greed comes in all flavors apparently even OSS...
wise move...RH stock will be a keeper but not at 80$....The last train from fairyland is leaving now don't be late....
how about a garbage can for an icon ?!?!?
Will, I've appreciated you sharing your story, and the final outcome, quite a bit. But that 20% number came out of left field. Where the heck did you get that idea? The standard underwriting commission is 7%, and if you have $100K liquid assets to chase IPO's, long experience, et cetera, you should do that. Don't take the word of an anonymous coward for it, though. Here is Red Hat's 424b1 form filed with the Securities and Exchange Commission: http://www.se c.gov/Archives/edgar/data/1087423/0001047469-99-03 1070.txt Hit the page down button just once to see the numbers laid out clearly.
Yeah I agree about the day traders.
I think Red Hat actually did 8000 people yet another favor, by immunizing them against the urge to buy RHAT at this price.
I also think the attraction to the daytraders is that it's a hot stock which is *not* an Internet stock. Go figure daytrader mentality.
Was anyone else watching CNBC Wednesday through Friday of last week? Did you notice they avoided covering the RHAT gains during the end-of-day summary portion on Thursday and Friday, and hardly talked about it all during the day?
On Wednesday they covered it as one of two IPOs, but then on Thursday when they were doing their end-of-day summary for NASDAQ they only reviewed the top four net-gain stocks (RHAT was fifth.) They also had the camera shot framed such that the fifth square didn't appear on screen.
On Friday it got even better. RHAT was second for the day, and CNBC totally skipped reviewing the NASDAQ "board", and only showed NYSE. Once RHAT was no longer showing up (because of the obvious and needed correction), CNBC were back to their usual show format.
Am I paranoid, or is the investment in MSNBC being leveraged? Double-plus-good news at 11.
CNBC IS ONE OF BILL'S VEHICLES. THESE EMPLOYEES HOLD A LOT OF MS SHARES. I ALSO NOTICED HOW LITTLE THEY MENTIONED REDHAT. HARDLY ANY COVERAGE OF IT AT ALL. THEY TRIED TO HYPE UP BLOCKBUSTER, BUT THAT WENT NO WHERE. TODAY THEY MENTIONED REDHAT GOING DOWN. I THINK CNBC SHOULD BE FORCED TO SHOW WHAT SHARES THE EMPLOYEES HOLD. CNBC COVERAGE IS VERY BIASED, I WOULD HAVE WATCHED CNNFN I WE HAS IT HERE. CNNFN HAD A NICE PROFILE OF REDHAT ALSO. CNBC IS PART OF THE EVIL EMPIRE
On Wednesday they covered it as one of two IPOs, but then on Thursday when they were doing their end-of-day summary for NASDAQ they only reviewed the top four net-gain stocks (RHAT was fifth.) They also had the camera shot framed such that the fifth square didn't appear on screen.
On Friday it got even better. RHAT was second for the day, and CNBC totally skipped reviewing the NASDAQ "board", and only showed NYSE. Once RHAT was no longer showing up (because of the obvious and needed correction), CNBC were back to their usual show format.
Am I paranoid, or is the investment in MSNBC being leveraged? Double-plus-good news at 11.
While you are at it, why don't you introduce a resolution to freeze all salaries and terminate the Employee Stock Purchase Plan? More money for shareholders! ... for about ten minutes, until all the engineers leave. In case you haven't noticed, software engineers are scarce and expensive. We ask for, and get, high salaries, excellent working conditions, and equity participation. Over the past 15 years, the free software community has evolved some mores and standards of behaviour. See the writings of Stallman; the Debian Social Contract; and Raymond's essays. Sure we have arguments but we have a hell of a lot of agreement on fundamental issues. One thing we agree on: if Red Hat started behaving like you suggest, significant numbers of people would add the phrase "redistribution for profit not allowed" to their licenses. It's a synergistic relationship. If you fuck with it cluelessly, you will break it. Bob Young understands our culture. Bob Young's company contributes to our society. That's why we are happy to see him prosper using our software. That's why he can continue to harvest the work of thousands of full-time-equivalent developers for free and stay on good terms with us.
Wrong:
That E*Trade house rule talked about place of residency, not of citizenship. And you become an US resident as soon as you live there (have an address in the US). So Linus would indeed have been eligible.
More like, you were a high-profile complainer. E*Trade threw you a hundred shares to shut you up. I'll say it again: IPO = Important People Only. I still don't know anyone (including some people in the affinity program) who actually got anything. I think a lot of it went to Friends of Redhat, a lot went to Friends of ETrade, a few went to affinity investors, and a very few went to vocal whiners who weren't afraid to attach their names to their very public complaints.
Linus is Finnish. His mother tongue is Swedish, but the Swedish speakers in Helsinki are all bilingual. Linus' name is not Swedish - any Swede can tell you that. I think it comes from the Baltic countries......
Woohoo! Nice trade.
Um, who do you think is taking the other side of all these trades dumbass? If you could only buy, who would be left to sell? You can't sell right away if you were part of the original placement. Obviously, I wasn't. Duh!!
Maybe it's because they truly aren't seeing those penguins?
If you were too look a little deeper, linuxfund is running a version of apache that has been moded to work with frontpage. So, those two suits that run that page must have hired some hacker to put together their web server and dumb it down for them. As for the AOL account, it might be hard for them to send mail to some people. I for one send *@aol.com to /dev/null :)
ok, I now have concluded you are a bigger bore than Will. What freaking losses do you have? i have read your site. Do you seriously think you have any claim for damges. If so, I have some penny stock I'll sell you at $100 a share
Will, not that you got allocated shares - which I am sure you got only because you are a pain in the ass, will you let the issue die now and quit boring us
and my portfolio is bigger than yours - nah nah nah Will, what is the purpose of the above conversation. to impress us all. Wow mission not accomplished
If you complain loud enough (send certified snail mail to E*Trade's Compliance Department and the SEC) you might just get somewhere. As soon as the expected price range increased to $12-$14, I called E*Trade Customer Service and verbally renewed my intention to purchase RHAT at the higher price range. As always, they said that as long as I had submitted an Offering Price/Market order, no further action would be required of me should the IPO price above the original $10-$12. I too was caught unaware the following day when E*Trade erased all prior conditional offers and opened another window for less than one hour.
However, after 1.5 unproductive weeks of calling, writing, keeping detailed notes and screen shots, I have finally been allocated 100 shares at the IPO price. No explanation was given (I didn't ask for one either) for why E*Trade had apparently changed it's mind. I wouldn't be surprised if they were doing so under the threat of legal action, either by potential investors or the SEC. If you're in a similar situation you might consider taking the same time and effort.
John Hughes
hughesj@cs.ucdavis.edu
A quick response to the last bit. Having Linux change the way all of business works is not as big a deal as having it change software development.
That's not what Linux is about. Money is important, but it's a means to an ends. Inspite of what most Americans seem to believe, it's not an ends. Changing the world of corporate finance doesn't effect the rest of the world all that much. On the other hand, we're fundamentally changing the concept of intellectual property. We're showing the world that better things can come through cooperation and people working together for no reward than through competition and capitalism. It's also, as Richard Stallman says, about freedom. We can now look "under the hood" of all of your software, understand how it works, and even modify it. It's about equality. Now, poor high school students will be able to use the same tools as the richest engineers. Every high school, library and third world country can have access to the world's greatest software. It's also about community and about fun. Any one of these is more important than any changes we'll see in corporate finance.
I hope as the movement progresses, money won't make people don't forget our values, or what we're all about.
- pmitros at mit.edu
That said, nobody except insiders could retire from this IPO.
Seems worth it huh? Do not forget the fun next year filling out Schedule D for Capital Gains.
I found http://www.fool.com/ to be an invaluable resource for people to educate themselves on stocks.
The Motley Fool to me, is the RTFM-HOWTO of Wall Street.
Two possibilities:
(1) GPL doesn't require Red Hat to run an FTP server. They could just pull the plug. RH CDs, though, could be copied by friends.
(2) RH could write a PROPRIETARY installer and put that on the distro CD. The installer would be non-GPL, closed source and RH could prohibit copying of CDs since at least one app is proprietary. This nixes both CD copying and the FTP download.
Why should I not expect Red Hat shareholders to eventually do the same? (most of whom will end up NOT being Open Source folk once grubby investment firms get a hold of most of the shares)
The GPL doesn't require that Red Hat run an ftp server for free downloads. There's also nothing saying that Red Hat has to make their installation routines GPL, in which case it'd be illegal to copy the CD.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
He said "as much as possible." Red Hat could shut down their FTP server, make their installation routines closed-source, and none of this would violate the GPL. The only thing they can't do is make the Linux kernel proprietary.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
They can make the next version of RPM closed-source, as long as it doesn't use any non-RedHat GPL'd code.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Not if they were trying to encourage people to buy the CDs at the store. The GPL allows them to charge for the cost of media plus distribution, so Red Hat could fulfill their obligations by offering RH CDs (minus an installer and anything else they chose to make non-GPL) for mail-order for $4 or something.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
No it doesn't, it says it must be available for a nominal fee covering the cost of media and distribution. This means that Red Hat could offer the source on a separate $4 CD that you could mail-order from them.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Most likely the latter option. This isn't a one-day fluke either, it's the second straight day that RHAT is down over 10%. It's currently at around $67/share, around 25% below its peak value. So if you short-sold Red Hat two days ago, you made money =)
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Well, 50x is generally considered a high Price/Earnings ratio. Anything above 100x is grossly overvalued. Since Red Hat is actually *losing* money ($130k in the last quarter) it doesn't even have a P/E ratio, since there are no earnings.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Yes, it's based on his name, which is why you are wrong.
If you're an American, Linus is pronounced lie-nus, so Linux should be pronounced Lie-nucks.
If you're a Finn, Linus is pronounced lee-noose, so Linux should be pronounced lee-nooks.
NOBODY should pronounce it linn-ucks. That's just ludicrous.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Red Hat and its shareholders can limit the distribution as well, not just the courts. All Red Hat has to do is put one proprietary app on the CD, and it becomes illegal for you to copy the CD, pass it along to your friends and colleagues, etc. Sure, you can copy the GPL'd contents of the CD and burn them onto another CD, but that'd be more work than most people are willing to do (not to mention the additional work of replacing the proprietary program if it's something important like a package manager or installation program).
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Eh. "linn-ucks" is just a natural compression of "lee-nooks" in American. They're close enough that most people won't even notice the difference.
;-)
I suppose that's an explanation, it makes sense to me now. Americans tend to do the same thing with words like football (which should be f-ooh-t-ball, not fut-ball).
Or the Greek "gyros" -- do you say "YOU-rohss", "GHEE-rohss", or "JY-rose"? Most of the people who sell them are just happy you're buying.
Well, since I speak Greek, I say "YEE-rohss" (the "y" is really something between a "gh" and a "y" that you Americans can't pronounce), and I really dislike it when people pronounce it "jie-rose". "ghee-rose" (with a hard gh as in "ghetto") is not difficult to pronounce, and at least better than "jie-rose" is.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Well, sure, it'd always be possible to use the GPL'd portions freely, and pass them around. I was just mentioning that Red Hat could easily cut down on 99% of that. If, for example, they made their installation program proprietary, you could pass around your CD to your friends, but they'd have to install the distro without the installation program, since the installation program would probably come with a one-computer license. You'd probably also have to do without things like RPM.
Yes, as long as the GPL holds up in court, the base Linux kernel and the GNU OS is still freely available, but Red Hat could do their best to make it very difficult to obtain it freely through them.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
It must be affiliated with George Costanza's "Human Fund"!
Just a guess, but I'll bet at some point during their existence, Red Hat offered Linus a job. If he had taken it, he'd be worth many millions today. That's a much better deal than being handed a paltry 400 IPO shares. (But he's given his reasons for not wanting to be beholden to one particular Linux-oriented company. So his entry in the startup lottery is with a non-Linux company instead.)
Uh... :)
Pretty smart to worry about the grovelling of someone who won't even post their name after their comments
leave me alone. I'm kidding.
Werd.
'less we forget, Red Hat invited open source people in on the ground floor of their IPO as a gift -- a token of appreciation, if you will. Sure E*Trade botched it up, or perhaps several newbie investors were stung by the harsh realitys of IPO trading, but nonetheless Red Hat was not obligated to set aside any shares for anyone and here we see several people whining about the whole IPO process not being user-friendly and now there's even a Red Hat Wealth Meter suggesting that the shares set aside for open source people were unfairly proportioned to shares for Red Hat employees. Gimme a break!
At least Red Hat made the effort of sharing the wealth with OSS developers -- show me another company that would have done the same.
The 'Nothing Succeeds like Success' article suggests that Red Hat is hilariously rich now because Linux is a good OS. (Of course, we know that Linux is a good OS, but Wall Street suits don't know or care about the difference.) This is not the case. Red Hat is hilariously rich because there is a lot of emotional energy behind their IPO and around 'Internet' stocks in general. This energy can make investors overestimate the likelihood that holding stock in a company will be profitable, which is normally their primary concern).
Eventually, the Internet stock energy will wear off and we'll be left with questionable business plans like Amazon.com's. I hope and do believe that Red Hat's business is based on something a little more substantive than simply selling customer information to third parties and invoking a third party (UPS) to mail out pulp novels and O'Reilly books to geeks.
In the short term, though, Red Hat is rich, and let's hope they invest their wealth in the community. There's no reason to believe otherwise, because they have been giving back to the community since the beginning, paying programmers to write GPL'd code and putting together a solid software distribution.
I hope Red Hat will continue to be a positive model for other free software companies.
"The Significance of the American Frontier" by Frederick Jackson Turner.
~ ~^~~^~
(I could have the title slightly wrong for which I appologize)
^~~^~^^~~^~^~^~^^~^^~^~^~~^^^~^^~~^~
ha! 113 shares at 85.323 baby! Better get out around 60, its not gonna reach 6 for a long time.~
^~~^~^^~~^~^~^~^^~^^~^~^~~^^^~^^~~^~~~^~~^
alas its only paper-tradeing~ ^~~~^~~^~
^~~^~^^~~^~^~^~^^~^^~^~^~~^^^~^^~
If they wanted to "share" then they should've opened it up even more and not necessarily limimted the trading to E*Trade. That's just bullshit.
The market cap for Red Hat is now about $5 bil. The market cap for SGI is now about $2 bil. In theory, inflated stock prices like this will even out. After all which one would you rather own?
If you want/need printed documentation, or want/need telephone support, you're going to pay for it, even if you can download over the net.
Besides, you forget something important. As net speeds go up, so do the number of packages for Linux and therefore the dist size. Also, the more people downloading it, the slower the transfer. So, the average download time might not change by that much.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
My ratio: 55% jeans-and-tshirt, 35% polo-shirt-and-khakis, 10% suits. But the suits were not three-piece, banker suits. Usually just a sports jacket, maybe a tie.
A very laid-back, enjoyable show. Lots of developers and enthusiasts, just like JavaOne and other tech-heavy expos.
Rob should make an icon for investment news :)
<tim><
For all of you out there that rode this IPO to its ridiculous current level, I have one piece of advice. Sell! Redhat cannot make much money giving away software. They can only make money consulting. There is limited upside here. Certainly not enough to justify 5.5 G$ in market cap.
Actually, JVC put out VHS decks below their costs to gain market share (dumping) and beat-out Sony, that's why we all own VHS decks.
----
Life if possible, art at any cost.
Pardon me, but I thought the early FAQs suggested it "rhymes" with the way he pronounced his name!
While the Redhat Wealth Monitor seems a reasonable idea, their calculations are not at all reasonable.
They equate the fraction of megabytes of the Redhat distribution created by The Community with the fraction of their market cap created by
The Community, which is outright ludicrous.
While Redhat has clearly derived a lot of value
from the contributions of the community (and
correspondingly, they have contributed back),
using the 87% number that the RHWM uses is baseless. This number assigns no value to their
marketing efforts, branding, service work, packaging, sales, etc, which have a much larger
impact on their valuation.
1) how many shares are available.
18 million Toys R Us shares at 30, are worth
more than 6 million of RHAT.
2) I put out last week, RHAT would jump 65 - 100,
first couple of days. And then slowly drop off.
RHAT will platueu out sometime Mid-September.
3) Investors usually cash in investments now and reinvest in Fall, watch for everything to start going up again in October.
4) Just check out cnnfn.com and other financial links, the average Joe/Jane can gather so much more information that was once reserved by the few.
:) back to work.
Awesome!
yes but if linux gets too bloated then it turns into another windows. It's also possible for another big company such as IBM or even Corel to take the whole thing and offer even better support than anything tiny Redhat may offer.
---
LinuxFund@AOL.com--red flag or meaningless?
Anyone know how long these guys have been in business and how much, if anything, they made off of RedHat's IPO?
I see even classic Slashdot is now pretty much unusable on dial up anymore.
I didn't say a thing about MS but they sent me this e-mail--
We have over ten million dollars to invest in the community and do not own
any of the Red Hat IPO or Red Hat in the open market.
Obviously we did not personally design the site nor discover that our ISP was
using an NT server. However, we are taking steps to re-do the web page with a
Linux-based program and to have it run from a Linux server. Our apologies.
Wm. Jay Roseman for
The Linux Fund
What I was questioning was whether a 'net and software savvy company would want the hassle of being considered clueless and newbie by many because of an AOL e-mail address.
What I'm guessing now is that these guys didn't even know that there was a Linux bandwagon to jump on until after RedHat IPO'ed. Probably thought RH had something to do with millenary. Are we really supposed to believe that someone with 10 million to play with couldn't have gotten a piece of the IPO at $50 or less and flipped it somewhere between $80 and $90?
I see even classic Slashdot is now pretty much unusable on dial up anymore.
I usually don't need any help making a fool of myself but apparently someone at CNBC has decided to help anyway. After carefully not mentioning the 4 penguins on the quilt they waited until after I posted to explain that, after not being able to find any footage of lemmings, they went with penguin footage a year or so ago and created an event called "a penguin" to denote 4 or more analysts stampeding in the same direction-- for example, now that Dell announced better than expected earnings, several are upgrading their recommendations of Dell. Sort of like waiting 'till this week to say "You should have gotten into the RH IPO".
I see even classic Slashdot is now pretty much unusable on dial up anymore.
> So Red Hat is worth 5.6 billion. Anyone have
> an idea how this money will be spent?
Most of this is still all "virtual" money. Bob Young holds stock that would be worth $500M if he would be able to sell them all at the current wall-street price.
Red Hat grossed about $84M through the IPO. That's the money they can spend.
Bob Young and the others who have stock will do with their money when/if they sell their stock is purely a private matter for those involved. Red Hat has no say in that.
-- Roger.
And then who do you call for support? Head on over to linuxjournal.com and find the Bob Young interview - as I recall, he specifically states that the $80 pays for the level of support that they feel customers will need and expect.
From what I've seen in the market this appears to me to be the fallout of some profit taking.
The articles that have appeared over the past day or so have been pretty neutral and I haven't heard
any of the talking heads on the street complain about the valuation. Long term I consider
Red Hat to be more attractive than a lot of the other tech stocks out there. I just wish I had jumped on
Juniper and RedBack. They're going wild.
I'm not an investment counselor, nor do I play one on television. These are simply my opinions.
YMMV, batteries not included, see store display for complete details.
--Kit
Former Inmate, VA Linux Sanitarium
Here's the link.
--Kit
Former Inmate, VA Linux Sanitarium
In a stock market with rational long-term investors the market cap is a good proxy for what the market thinks the future profits of said company is.
:-P
Why you ask?
The basic principle of value-based investing (as practiced by Peter Lynch and Warren Buffett) is to look at where you think a company is going, compare that to the market cap, and buy when the current market cap is below what you think that the future one will be. The point being that the value of holding a stock is eventually determined by dividends, which in turn depend on earnings (aka profit), and as a rule of thumb the relationship in a stable company is that market cap tends to come out to 20 times earnings. Therefore if your estimate of future profits says that the future market cap should be above what it is today - voila! A long-term investing opportunity.
So a market cap of 5 billion for RHAD would mean that someday it should be making 250 million profit per year in a few years. Analyze the Linux market. If Linux turns the OS market into a commodity market, then RedHat is going to have fairly low profit margins, so that level of profit requires truly impressive revenue streams which, at a low per unit cost, implies very impressive volumes.
As in several orders of magnitude greater than the current OS market.
Now there are other theories of investment than value-based investing. For example George Soros does even better after a speculator, trying to make predictions based on his judgements of the irrationalities of others. (A quote of his, "An investment is a speculation gone bad.") However people who try to imitate Soros are more likely to wind up broke than people who imitate Buffett.
Cheers,
Ben Tilly
My usual seat in the cluetrain is at A HREF="http://pub4.ezboard.com/biwethey.ht
And there are solid reasons for it. A brand name company is expected to have an easier time weathering changes, and so people feel more sure that they will get a long-term steady return from the stock. Technology and growth stocks are always trading to some extent on the expectation (hope?) that because their industry is expanding they will have chances to grow and earn more in the future, thereby paying more back. The same holds for small-cap companies which have room to grow just because they are small. (But don't bet too heavily on any one of them!)
By contrast you may find lower ratios in something like power companies that are very stable, but have essentially no growth prospects.
Cheers,
Ben
My usual seat in the cluetrain is at A HREF="http://pub4.ezboard.com/biwethey.ht
There are many programs in RedHat that source has to be offered for. But they can also distribute non-GPLed software and nobody can make them distribute source for it. They can also tie things together with handy administrative utilities that they wrote, and again source does not have to be distributed.
Now RedHat has been really good about this. But availability of source for the GPLed parts of RedHat does not mean that anything like a working distribution has to be freely available!
Cheers,
Ben Tilly
My usual seat in the cluetrain is at A HREF="http://pub4.ezboard.com/biwethey.ht
I already gave my basic analysis in another discussion. (Which saw little play because of technical problems with /..)
Basically unless RedHat can get into other lines of business or significantly change the market dynamics upon which their business is based, I don't see them as a long-term investment being worth anything close to what they are currently priced at.
Sincerely,
Ben Tilly
My usual seat in the cluetrain is at A HREF="http://pub4.ezboard.com/biwethey.ht
I expect to see it settle back down between $15-25 depending what the hype is when it gets back down there.
If you've got stock now - SELL!!!
r@m
r@m
Who decides what is "the best interests of the stockholders"? Frequently what seems, on the surface, to the best option can have side effects which make it sub-optimal.
So when a tech decides to download(!) a freely available OS which comes with zero support (and
... warranties and conditions, either express or implied, including, but not limited to, implied warranties of merchantability, fitness for a particular purpose... " blahblahblah ? Also, the beauty of open source is that one can have their own self support. With a mysterious licensed binary that fails in a mission critical application, if tech support can't help, too bad! They're under no legal obligation to make it work. At best you might get a refund.
zero culpability should something go wrong) and
use it in mission critical applications, the PHBs won't get the screaming willies.
Ahem - I'm starting to get pissed over this - where is the 'culpability' in licensed proprietary software should something go wrong? Every EULA I read has verbiage to the effect of "disclaim all
Chuck
try { do() || do_not(); } catch (JediException err) { yoda(err); }
Yeah, than smbd just write another installation routine. Installation routine is mighty irrelevant. Changes in the core system we should worry about.
<^>_<(ô ô)>_<^>
And we all switch to .deb. Much rejoicing..
<^>_<(ô ô)>_<^>
Red Hat's heart was clearly in the right place with respect to the IPO, and as a business, they should go about making as much money for their investors as they possibly can in good conscience, AS LONG as they do not compromize their support of Linux and the Free Software community in the process. (I do hope they gave Linus, Alan, and others a bunch of shares, though! :-))
However, I think it is very appropriate for people to whine about the IPO process. It wasn't just "botched," it was IMHO manipulated to exclude as many "geek" investors as possible in favor of e*trade's priveleged clientel. Those who were burned can and should whine, loudly, to the SEC. Everyone knows Red Hat isn't at fault here, rather e*trade is. However, those who were burned should not go letting e*trade off the hook for this debacle, simply because we like Red Hat.
DISCLAIMER: I made no effort to take part in the IPO and have not suffered any loss as a result of e*trade's behavior. My opinions are my own, based on conversations I've had with others who were burned, as well as messages and articles I have read here and elsewhere.
The Future of Human Evolution: Autonomy
In the future do not invest through on-line brokerage accounts. You will not have the service when you need it (it is even legal for them to freeze your account for up to 60 days).
Transfer your accounts at E-Trade to a full-service brokerage firm.
There's nothing wrong with discount electronic brokers, as long as they're honest, and on the ball. I don't have to transfer anything, as I've kept my current trading account, and only sent E*TRADE some spare change I was keeping under the mattress.
--
That's cute.
As for me, I'm going all the way with this. E*TRADE doesn't have the luxury of throwing me a handful of shares to shut me up. So, I'm going to wait and see if NASD wants to give them an anal exam; then go shopping for a lawyer. I now finally received my money back from E*TRADE. I think I'm going to use that money to pay for a nice Armani suit.
--
The IPO itself may be over, but the ball is still rolling full steam ahead. I anticipate that this week's is going to be when NASD and SEC get flooded with all the complaints, and E*TRADE's Legal and Compliance gets a bunch of certified mail. At least one very well respected Wall Street daily is going to do a major story on E*TRADE's fiasco, according to their reporter who extensively interviewed me last week.
The fireworks haven't even started. E*TRADE may have screwed me out of some major cash, but I'll get it back in form of priceless entertainment, watching them SQUIRM.
--
First of all, if E*TRADE's problem really was that there wasn't enough shares to go around, you wouldn't see so many people bitching about it. A few would be barking at Red Hat, for not allocating enough shares, but that's pretty much it.
If E*TRADE simply told me: Sorry, can't give you X shares, we only can give you X/2, or even X/4, because of demand, I wouldn't have any problem with this whatsoever.
But that's not what happened, was it? At first, while I believed that E*TRADE did have valid and reasonable reasons why they blew me off, I wasn't really upset that much. It was only after I started reading what everyone else was saying, and after I obtained more information, did I start to get pissed off, when it became more and more obvious to me that this whole affinity program, as managed by E*TRADE, was a complete and utter sham.
First, they started declaring pretty much everyone to be ineligible for the program. Then, when called to task for it, E*TRADE backpedaled, and with a "wink wink nudge nudge" attitude started telling people to claim that their net worth exceeds Donald Trump's.
Then, after some people were actually accepted into the affinity program, E*TRADE suddenly decided to throw them, and everyone else, out of it, unless they receive a telepathic message that they must "reconfirm" their application within a fifteen second time slot, and in the middle of the night for people in some time zones. And after they figured out that the instructions E*TRADE E-mailed for reconfirmation were actually wrong.
Only after someone (probably Young) ripped them a couple of new assholes, did they backpedal again, and sheepishly agreed to extend the alleged "reconfirmation" period for one more today, FINALLY giving people enough time to jump through the hoops that E*TRADE erected for them.
And then, after all that, E*TRADE still claimed that there weren't enough shares to go around?
Puhleeeze...
Look, how many people, REALLY, are bitching about this on Slashdot? I'd say less than a hundred. Even if that's only 5% of everyone who was left in the affinity program, after E*TRADE finished throwing as many people out as they could, and there were about two thousand people left, you're telling me that the average number of shares in an application was 400?
There was certainly individuals who applied for a thousand or more shares, but, there weren't many of them. Most people, as you said, sent in just enough money for 100 or 200 shares.
This doesn't add up. Red Hat should demand a full accounting from E*TRADE as to where every one of those 800,000 shares went. E*TRADE better be able to document that there were at least 800,000 shares distributed through the affinity program. If they can't, and if they did not give everyone the amount of shares they requested, that's food for NASD and SEC's lawyers.
--
Perhaps Name Brand Awareness??
Seriously, we don't know what Red Hat will focus on in the future, whether they'll focus highly on support, or service, or something else. But that's the Linux business model. You can have a brand name without a "product" to sell.
To put it in other way, there is a local computer consulting company that doesn't have a product of their own to sell, but is still in business. The only difference between reselling Windows, and reselling Linux, as I see it, is that Microsoft doesn't allow you to rebrand their products.
-BrentEh. "linn-ucks" is just a natural compression of "lee-nooks" in American. They're close enough that most people won't even notice the difference.
;-)
... till then, we should all just be happy people are using it!
For myself, I choose to pronounce it "linn-ucks" rather than "line-ucks" just because it sounds nicer, but also because it's closer in sound to both "unix" and "minix".
There isn't a "should" here, since there aren't any real rules for when a word jumps languages, especially an invented word. I'm more of a usage-descriptive dictionary type, myself, anyway. Most words that come to us start out being pronounced like the original word, then gradually come to be pronounced according to local rules. Example: French "forte", which is one syllable. But it came to be pronounced "for-tay", which is wrong, but makes more sense to English-speakers, because the "e" at the end is superfluous. Or the Greek "gyros" -- do you say "YOU-rohss", "GHEE-rohss", or "JY-rose"? Most of the people who sell them are just happy you're buying.
(On the other hand, I speak French well enough that I absolutely refuse to say "lingerie" lahn-zha-RAY. It's LANN-zhay-ree, dammit!)
I think the LEE-nucks and LINN-ucks pronunciations will eventually be supplanted by LINE-ucks, just because American English works that way
lake effect weblog
{Network engineer in Chicago--looking for work!}
GPL states that the source must be freely available.
That means,
1) On the CD distro
2) FTP
3) Through the mail
RedHat's not stupid. Shareholders or no.
Get a life, not a lifestyle. - Hikem Bey
For Immediate Release: RED HAT FINALIZES DEAL WITH ANDOVER.NET, EXCHANGES RED HAT SHARES FOR SLASHDOT MODERATION POINTS
Damn, skimming through the posts on this topic, it looks like anyone who raises the possibility that Red Hat is overvalued at $60-$70/share gets their score whacked. I think I need to go back and read the Slashdot posting FAQ: I thought as long as we gave Linux the rah-rah treatment and trashed Microsoft, our posts were guaranteed an extra point or two -- now it looks like we have further requirements of kissing Red Hat ass and suspending any Wall Street knowledge.
I know, I know, I shoulda RTFM.
Cheers,
ZicoKnows@hotmail.com
Here in America, you don't the name pronounce Linus like "Lynn-us," you pronounce it like "Line-us." For God's sakes, man, didn't you ever watch Peanuts as a kid?
Not to mention that Linus doesn't pronounce his name like "Lynn-us" anyway, but more like "Leenus." Basically, if there's one pronunciation that doesn't fit, it's the "Lynn-ux" one -- if you want to make it sound like the guy's name in his native tongue, say "Leenux," just like Linus himself pronounces it. Alternatively, use the Anglicized version and say "Line-ux." "Lynn-us" should die already.
Not meant to flame you, since you seemed good-natured enough about it, although I'll take pleasure in tearing the head off of anyone who tries to berate me into pronouncing it the way they do, especially when (1) their choice doesn't really make sense, and (2) Linus himself is agnostic on how other people should pronounce it.
Cheers,
ZicoKnows@hotmail.com
Did Linus get anything? I'm sure he got the letter...
I can't find anything on the Yahoo Insider.
- Hugh Buchanan
- Userfriendly.com
It won't. Keep in mind that Red Hat STOCK is worth a total of $5.6B. Red Hat actually RECEIVED $14.00 a share from the initial investors and only made $840M from the deal ($14.00 per share, times 60,000,000 shares according to their S-1/A filing)
$840,000,000 ... while it may seem like a lot of money to have in the bank (and for a new company it can be), is NOT a lot of money at all. I've heard stories that companies like Microsoft have $1B war-chests that they rarely dip into.... and RHAT IPO'ed not to have a warchest but so that they could grow the company.
What it DOES mean, though, if RHAT stock stays even approximately close to where its at, is that RHAT screwed themselves by pricing their IPO too low.
Actually, to correct my own figures...
They only SOLD 6,000,000 shares, so they only made $84M on the deal. There's another 60M shares that are privately held (outstanding but not part of their float) which inflate the market cap greatly (probably still large majority held by Bob Young, Intel, etc. would be my guess).
Either way, they still didn't make NEARLY all that much off the deal.
I expect it to come down quite a bit...
Looks like it may have stabilized at $65 today,
but will it come down another $10 tomorrow?
What about the next day?
I'm also really surprised that RHAT is the only stock people are talking about.
Some of you must have taken some profits from RHAT.
Are you holding on to the cash to buy some back at $35 (or whatever),
or is there some other Linux related company worth investing in at the moment?
What about SGI? I've seen stories about them dumping NT, focusing on Linux, and building a Beowulf cluster in Ohio.
Anybody have any thoughts on whether their stock might be a profitable long-term buy?
Sure you are, flamebait.
Don't you know you can't short a stock for 30 days after its IPO?
other ftp servers would get much busier then.
hackers would fork off a GPLed installation routine.
I don't think so. At this point, all I care about is using a PC (and a server) that doesn't crash every five minutes. I could really care less if Linux was free or not -- as in either speech or beer. I just want an OS that works (this is one of the reasons why I like Solaris). If it attracts developers -- and therefore software, drivers, etc. -- then all the better. If it takes making money in order to do this, then so be it.
The fact that the OS which is coming up in the world happens to be GPLed is icing on the cake as far as I'm concerned. I'm a card-carrying Libertarian; I love a free OS in all senses of the word. But I'd also pay money for a better mousetrap. Linux works very well, and it does what I need it to do. It happens to be free, but if the GPL expired tomorrow and Linux became proprietary, I'd still use it. Because it works, and that's where the traction is.
-B
Ash and Hickory, straight-grained and true, make excellent bludgeons, dandy for the cudgeling of vegetarians.
I know that some people see OSS, Linux, GNU, whatever as a sort of religion. And these people get squirrely when things start moving into the mainstream and getting "corporate-ized". But this is what it will take to get Linux and OSS into position to replace (or at least augment) NT and the like. In a way, it legitimizes Linux in a lot of people's eyes. Like it or not, that's the way it is.
IT managers need to see things like an IPO and articles in the Wall Street Journal about Red Hat -- it gets Linux and OSS on their radar. And they start wondering what this whole Linux thing is about. And they read InfoWorld or Wired and start getting a clue. They start feeling a little better about Linux because they've "heard about it". So when a tech decides to download(!) a freely available OS which comes with zero support (and zero culpability should something go wrong) and use it in mission critical applications, the PHBs won't get the screaming willies. To them, Linux can be taken seriously now because of things like the Red Hat IPO. Red Hat and Linux have now become "real" to the PHBs.
Anyway, I could go on about how Linux was the red-headed stepchild of the corporate OS world, but you get the point. The bottom line is that the IPO goes a long way toward guaranteeing that Linux will become a success. And that means Linux will not just live, but grow. And that means we all get a better Linux.
If the IPO gets just a handful of developers off the MFC tit, then we all come out ahead in the long run -- no matter what philosophical issues we might have about Red Hat making money off OSS. Let them make all the money they can, I say.
-B
Ash and Hickory, straight-grained and true, make excellent bludgeons, dandy for the cudgeling of vegetarians.
I think the daytraders have gotten hold of this thing. Intraday range 63-75 today with high volume.
I wouldn't expect RHAT to settle down in the forseeable future. It's officially an "Internet Stock."
Than one with a past.
You seem to be suggesting that redhat will go down and SGI will go up. I would suggest that the two are only somewhat related. Though, given the way SGI has thrown itself behind linux, its future sucess may be tied more closely to the success of redhat than either of us are giving credit for.
function fun_with_zealots () {
echo "What?! How DARE you disrespect Linux and RedHat like that! Redhat 6.0 is SOO much better then Micro$haft9x and MSOffi$e! BLOATWARE BLOATWARE BLOATWARE! I ONLY use Koffice because its GPLd and gpl is good. anything that comes on 3 cds is just bloatware bloatware bloatware.. die M$ die!";
}
function voice_of_reason () {
echo "Ok, that was fun. Fact is, it is kind of refreshing to hear the voice of reason in an otherwise Zealot run arena (Linux). Nice comment. If I could moderate you, I would bump you up a notch... But I can't. Oh well.";
}
if ($user == "zealot") {
fun_with_zealots();
} else {
voice_of_reason();
}
Why I wrote this comment as a PHP program, I will never know...
Corndog
Before the flamethrowers come out, let me state that I:
1. like linux
2. wish RHAT all the best
3. am happy to see the linux community enjoying success
Now on to some critical commentary.
It's a safe assumption that Linux is good. It brings a lot of value to those who use it, and is definitely benefiting from a lot of investments and attention these days. I still have yet to see, however, how a dedicated linux company (eg. Red Hat) can become the "next Microsoft/Dell/Cisco."
Let's define "next Microsoft/Dell/Cisco." I'm talking about a very succesful public company, with rapid sales growth, a extremely bright current and future prospects.
For a company to be a successful, it must grow its sales, and figure out a way to make decent profits. How does a company grow sales? Sell something. What does Red Hat plan to sell? $99-200 Linux distros, and Linux services. It's difficult for me to see massive year-to-year revenue growth selling something that I can dowload for free, or buy from another vendor for $5.00. That leaves services/consulting.
I work for a consulting firm, so believe me when I say that selling services is hard. There are reasons why public companies that sell consulting services aren't valued as richly as companies that sell software or hardware, for example:
1. Selling consulting services often depends on personal relationships with your client(s).
2. The growth and viability of your consulting practice is directly tied to your employees. If someone from Dell or Microsoft quits, the company is affected in an indirect way. If one of my coworkers quits, that creates an immediate revenue hole of $200,000 (2000 hours*$100/hour). I've seen small consulting/services companies literally die over the course of a few months, as their revenue streams literally disappear in the form of massive employee turnover.
Despite the difficulties of running a consulting/services business, many companies do try, and succeed at it. The whole "ecommerce" thing is creating massive opportunities for the industry, that is only going to get bigger as this whole Y2K thing passes away. It's a good time for a small company to be in the consulting gig; there's not a whole lot of recognized expertise in ecommerce consulting, and a small practice can slip under the radar of the big guys, and grow fairly quickly.
Red Hat, however, is not going to slip under anybody's radar; they have too public of a profile. This assists them with recruiting, but will hurt them if they start making inroads against larger competitors. IBM, for example, is kicking all kinds of booty with its Global Services outfit. I personally don't like competing against them. I have little doubt that the companies that are supporting Red Hat in various ways today will not hesitate to start pulling plugs should Red Hat successes start affecting their meal tickets.
The popularization of Linux can hurt Microsoft, but hurting Microsoft does not automatically create an investment opportunity.
I believe we are watching the beginning of a Linux-induced revolution in corporate finance
Err.. excuse me? Either I am going blind, or you are seeing something that I am not seeing. What revolution in corporate finance? This was a standard plain-vanilla IPO. By Wall Street standards nothing interesting happened. Other stocks, notably so-called "dot-com" stocks had huge run-ups in their stock prices on the IPO day and after that. Netscape already brandished a sky-high market cap while giving away its principal product for free.
So a sexy software company goes public, the float is very small, nobody can short because there is nobody to borrow share certificates from, and the stock price goes through the roof. So what else is new? Again, what revolution we are talking about??
Kaa
Kaa
Kaa's Law: In any sufficiently large group of people most are idiots.
//Market Cap
number_of_shares_sold = 6M;
total_number_of_Redhat_shares = 60 M;
price_per_share = 70.75;
Market_Cap = (total_number_of_shares * price/share );
//Market Cap ~= 5,000M
//Cash earned at 14.00 / share sold is 80M
//Market Cap is really a useless figure.
// Any Questions?
I think you may be misinterpreting the figures. RedHat released about six million shares onto the market. However they only received $14 dollars a share. The difference between that and the current value of the shares is profit made by investors. RedHat don't have $5.6 billion in the coffers. They have about $84 million, less whatever percentage their underwriters get.
It figures this post was from an anonymous coward......
O.k. I'll bite. Why buy the RedHat CD's when you can download it??
First off, I'll admit that the copy of RedHat on my personal system WAS downloaded of the net. I usually try to stay up to date with the latest Rawhide RPMS, so the CD is useless to me. And I don't use tech support, I use DejaNews.
However, I work for a small consulting company, and we've been setting up RedHat Linux file servers like crazy. With each one we deliver a $70 boxed Official RedHat cd set. Why? First off, $70 is peanuts on top of the price of any decent file server. (Much cheaper that Netware 5 or NT4.0!!) Second, our customers feel more comfortable having a nice, professional looking bootable CD they can re-install from. The tech support from RedHat is nice. And the books in the box give them a bit of a basic intro to what's on the server.
Basically, at $70 is to cheap NOT to buy!! $70 is a lot for me to spend on my home system.... It's piddly squat nothing to spend on any decent server!
But I LOL when I read people (including some not in the affinity group) bitching here about putting in for tens of thousands of dollars worth of RHAT and not getting any. I would have thought people smart enough to be coders and consumers in the open source community would have at least some clue about the laws of supply and demand. It's simple frickin' math.
Let me use an extreme example, but one drawn from reality. Suppose every affinity-group member sent in $90,000 and ordered 6,400 shares at $14. Red Hat set aside 800,000 shares for "friends and family," and even though that includes company directors, officers and employees -- a point often forgotten in the outcry -- I'll still assume 800,000 shares for "the community." So 800,000 / 6,400 = 125. If more than 125 coders got The Letter, there wouldn't be enough shares to give every one of them all of what they wanted. I haven't seen a reliable figure for how many got The Letter but it sure seems more than 125 have posted here.
Probably few E*Traders put in for that much, but clearly the demand exceeded supply (again, it would be useful if E*Trade would disclose how many got The Letter, the total number of affinity-group shares requested and allocated to Letter-bearers, and a similar accounting for those of us who did not get The Letter). When that happens, if you get anything at all at the offering price, you're lucky. If you get shut out strictly because of supply and demand, that's the breaks. Get over it.
I also laugh when I see someone complain that they put just enough money into their shiny new E*Trade accounts to cover 100 shares at $12 each, the top of the original price range (and I'm not talking here about anyone who really couldn't afford more than $1,200). These folks obviously have not even the faintest idea how IPO pricing works, and I highly doubt they'd have read in the S-1/A and E*Trade's disclaimers that IPOs are highly speculative -- i.e. that you can LOSE a lot of money playing them. Obviously many of us felt RHAT would do well, that open source can work in the real world, but there were no guarantees.
I suspect the discussion here would have been a whole lot different if RHAT had tanked coming out of the gate or shortly thereafter (as so many other IPOs did in the preceding couple weeks). Of course that would have happened only if there was insufficient demand for the stock. Then everyone who bought their (formerly) $90,000 worth would be crying that E*Trade and the SEC made it too easy for them to take a bath.
Freedom's just another word for nothing left Zulus
And would you send your hard-earned cash to someone using the address LinuxFund@aol.com?
I'd like to see some evidence that this isn't a scam.
Freedom's just another word for nothing left Zulus
& I'm all for telecommuting but how many investment funds use a residential address (177 East 79th St. NY NY is an apartment building) for snail mail? Not even a P.O. box.
Freedom's just another word for nothing left Zulus
When exactly were you told you got 100 shares? Early in the afternoon of the IPO or sometime thereafter?
Freedom's just another word for nothing left Zulus
How much did RedHat sell? $10M
How much is it worth? > $5B
I know very little about economy and business, maybe that's why I don't get it.
I would have worn the polo-khaki.... but what is wrong with wearing a suit? it doesn't make you evil. In fact, IBMers wear suits and they support Linux, meanwhile, when was the last time you saw Gates wear a suit?
Opinionated Law Student Strikes Again!
RH can (and did) expand to other products, for instance selling corporate packages which include support. If they play it right, the CD won't be their only moneymaker.
Joe Rabinoff
The $70 is the price that you pay for a printed manual, official support, and physical distribution of the media. If you want the software for less, then don't buy this version.
Redhat made a smart move by raising their prices. I used to buy official redhat CD's because I liked the distribution and wanted to help support the company. But by raising the prices, they are indicating that they don't want or need this type of help anymore. So just buy it from cheapbytes or download it for free. Support redhat by continuing the development of linux and other free/open source software. Or support them more directly by buying stock.
99 little bugs in the code, 99 bugs in the code,
fix one bug, compile it again...
I'm a leaf on the wind. Watch how I soar.
Simple point. More a propos is the fact that Red Hat does not want their core business to be selling an operating system. Red Hat's core business is and should be support, education and packaging. They have shown that they can make a good deal of money doing this. More importantly, having the operating system freely available _increases_ their support and education revenues.
Further, as they noted in their SEC filings, their business depends to a great deal on the goodwill of the community. The big reason that they can maintain very good margin on OS products that they actually do sell is that people are willing to develop free software that they can use. What do you think would happen to this goodwill if Red Hat were to become closed? Shareholders aren't stupid. Most shareholders (particularly in businesses they don't completely understand) recognize that the CEO knows more about the business than they do.
I'm no legal expert, and from what I have seen of the American legal system so far, I'm probably wrong about this, but the best interest of shareholders can onyl go so far.
All the investors invested in Redhat full knowing that they give away their distribution and hope to make money off services and support. That's their bussiness. Whether or not this bussiness has a future or not, is a different matter.
I mean, I can't buy stocks in a company that sells Apples and then sue them because the Orange bussiness is more profitable, can I?
While I have upped my original projections from the $20-$30 per share range to the $30-$35 per share range sometime around the end of this month, I still think we'll close the year (well, ok, maybe early December) around $100 per share.
...
Please, do panic and sell your shares, I want to buy them. As you may know, I don't have any yet, but I buy long-term, so I can be patient.
Seriously, though, if cash is critical for you, you could sell now and buy back in below $40, but don't count on getting shares in another E*Trade IPO real soon. Of course, you know how worth while that possibility is
Will in Seattle
Yeah, I've been printing out a bunch of the news items and I should file sometime this week myself.
Congrats to all the linux geeks in on the IPO. Remember that you're owners now! Don't sell out if you don't need to.
Will in Seattle
Seriously, Red Hat only got the IPO cash. The company has not sold any new shares past the IPO yet, they're not allowed to. And the price they got would be about $10.80 per share issued, which is not the same as the valuation price.
Will in Seattle
Yup. I too think we need an investor news icon, maybe the stock symbol with a dollar sign overlaid. Could be used for all IPOs of Linux and BSD, etc. as well as discussions about E*Trade and other online brokers.
Will in Seattle
Linn-ucks. Linux.
... it's the Net.
It's like the Net. I remember VP Gore going for the Information Superdooperhighway and the local papers pushing The Internet.
But the reality is that we use English and we pronounce it the easiest way we can. And since some of us said the Net, we pushed it and
So, live with it, it'll be Lynn-ucks.
Will in Seattle
Hmmm. Well, since I wasn't in the Affinity group, who could get up to 400 shares, but in the second (normal trading) group, it looks like, after they reviewed my account and the fact that I had qualified for the first round and then verbally confirmed for the second round with a broker the afternoon prior to the whoosh-answer-this-alert-before-you-get-it second round redo, that I got 100 shares.
Hold till you're old.
P.S.: Now I just have to wait for the 30 day and 90 day and 180 day periods to snap some up at cheapbytes prices.
Will in Seattle
Hmmm. OK, how about a garbage can with a dollar sign painted on it in bloody, dripping red?
Even more fun.
Will in Seattle
On the phone Monday late afternoon. After the Affinity group's extended extended extended deadline had passed. This week.
....
Note I may not be quite like everyone else, in that I phoned them and talked to a broker to reconfirm my interest at the $12-$14 level. So I actually could say that I had reconfirmed.
100 shares of RHAT on the wall, 100 shares of RHAT. Take one down, pass it around
Will in Seattle
Seriously, when I got my E*Trade account, I had to use a different login than WAFFLECK, as someone was already using that. Is there any way to get a user login list or somesuch? Just curious.
...
If you're afraid to attach your name, of course you won't get anything. Which is why Anonymous Cowards are given lower moderation points
Will in Seattle
I stand corrected. I figured they didn't qualify for the lower rate and I had to read some of the documents really really fast, so that one slipped by me.
But my point is still valid, in that all they have is that $13.02 times 6 million shares.
Of course, now that the IPO was successful, they can issue stock (is it 180 days or 90?) in small drips that will get them a lot of cash.
Will in Seattle
I'll pay you $20 per share for them.
But then, I already have enough money to retire invested in a lot of other things, so I can do this.
Anyone want to do Cannes next year?
We can wear red hats and be nouveau-geeks.
Will in Seattle
Hey, I put more money into International Stock Mutual Funds then I have in Red Hat ...
Yeah, you can pick up MSWD with a really low P/E right now. But I'm sitting on a lot of cash, more than I like to.
I'm putting this first 100 shares in a mental lockbox. I may buy more and sell it, but I think I'll keep this initial allotment for a long time.
Will in Seattle
Hey, who said he was more boring than me?
Will in Seattle
Seriously, for me Red Hat is a diversifying move, by spreading out investments in a number of different areas. If you were your typical Affinity group member, you may have 100 to 400 shares, but that was most of your free cash. So your risk factor is much higher, since you're not diversified.
Basically, if a single stock is more than 5% of your holdings, especially that of your workplace, you should consider rebalancing your investments into other areas.
There's nothing wrong with single stocks, especially as used with DRIPs in the buy and hold manner, but they increase your risk factor if your holdings in a sector or a stock are too large. My holdings are heavy on tech and pharmaceuticals, but then I understand those areas, so this is not an unreasonable risk.
Your average person has most of their holdings in their retirement accounts, with about 50% in the stock of the company they work for. This is not a diversified portfolio.
Will in Seattle
Seriously, Net stocks don't perform well with P/E ratios, because ---
THEY'RE TOO NEW
sigh. So they don't have earnings, and when they finally get some, this is bad (!!) because now they have a P/E and it's something like 500 and everyone freaks out.
Which is just plain stupid.
I love low P/E, 5 is nice (MSDW), 10 is good (LMT), 20 is ok, 30 is a bit high (but average today), 40 is pricy, 50+ means I better look more closely.
Will in Seattle
maybe redhat should think about buying SGI, then.
i guess the question i have is:
who is redhat going to acquire? it seems if you're not buying up companies with you're inflated stock, then you just don't belong in the the market.
My agent went to Linuxworld, I asked if he was going to wear a suit.
He said he'd wear his BeOS T-shirt.
So what was the ratio of suits to T-shirts at Linuxworld?
George
At least until RedHat finishes it's Sooper-Dooper-Amnesia-Beam to make everyone forget the GPL exists.
Right now it's in beta, and the only real affect is to make people forget the names of any of those grass eating things with horns on that live in Africa on the plains.
George
So, to keep with the GPL, what is the cheapest way for RedHat to make their GPL'ed software available at nominal cost?
Still probably ftp.
George
-- $SIGNATURE
It will be interesting to watch this play out.
-- $SIGNATURE
the rest of us will just have to hold our ears as well-meaning Wall Street types pronounce Linux as "linex"
I hope that's how they pronounce it. I refuse to pronounce it the way everyone else seems to. (Lin-ux? reminds me of lint!) I prefer "Line-ix" anyday.
Cheers,
Marv
I'm not a journalist, but I play one on slashdot
Right now, only 1.2% of the shares (800000 out of ~63 million) are for people on "the outside." I don't see this happening, especially since the other 98.8% is owned by people who work for Red Hat.
Isn't it also against the GPL to charge for it? I'm sure RH could think of charging for wear and tear on their server, but come on...I highly doubt this would happen.
The execs (the 98.8%) wouldn't allow it to happen.
I have been watching the "Linux Explosion" for about 3.5 years now (strange as that is how long I have been using Linux...) and I can see why there is a fear of Wall Street.
.02$
Consider you are Joe C. Coder in 1997. You are gladly hacking away on xyz program. The community is solid (at least it seemed so from my point of view) and most people look at you with raised eyebrows if you mention Linux outside of a CSc lab.
Now fast forward a couple of years.
IBM, Oracle, Corel, etc, etc, etc are all pitching their hats (so to speak) into the bin. Great, they are adding to the code/community and it continues to improve. And ever so slowly the media start to latch onto this "Linux" thing.
Actually, the media caught on and THEN the corps came a-circling. small point there.
Now look at our happy little OS / community.
Ego, the type derived from 'net respect and not peer respect,is starting to appear; money is starting to drive. Remember the flames (yeah, like they are a thing of the past) in any discussion of GNOME vs. KDE?
The OS lives on, better than ever, HOWEVER the community aspect is starting to slip in the morales department. I have occasion to hang out on IRC and you see lots of "the newly christened" Linux newbiew happily singing the praises of the OS but if you so much as mention the "evil empire" of MS you will be on the hot end of some rather poorly constructed flame. These new folks just take as the gospel the mainstream media articles that support linux.
They dont bother to do any research to the reasons behind the comparisons. They just want to appear knowledgeable for the "street cred".
In essence these new "Linapostles" do more damage than good. It is great that they use Linux, it is foul that they just pick up the old school line of World Domination without actually knowing why. To defend Linux with kneejerk precision and flame any pundit that would dare condescend on their "holy" OS. The MS Windows evangelists are moving...to Linux. They have found a new podium to bang upon and the unclean (and loud!) masses are coming!! .
The reason I started using Linux was the great atmosphere; there were lots of intelligent discussions to read, never once did I have to trudge through ascii haxor text. I think the atmosphere is starting to cloud and this community that we all cherish, and I have enjoyed being part of, is slowly mutating...
to a gang.
I hope that I am wrong.
my
Za's Vid
E/.
ps. for what it is worth MS got a total monopoly because Word 6 was (and still is when I have the need to be a wordsmith) simply the best of the wordprocessors. If Word worked (natively) in Linux I would buy it.
********************************************
You may fire when ready.
************************
What, me worry?
now that they're worth so much, how about not charging $70 bucks to buy it? Or at least make an offical CD that isn't ten times as expensive as cheapbytes....
LOL
Dont be to sure about RedBack and Juniper... They are hot now, but once they get leapfrogged, I think they are gonna take a nice hit. :>
The price of Red Hat's success is that they sell their product! To use Red Hat Linux, you gotta buy their distro, use a friend's, or download it yourself. If anything, Red Hat will -increase- their price now that they're so famous. And good for them.
Wah!
IT managers need to see things like an IPO and articles in the Wall Street Journal about Red Hat -- it gets Linux and OSS on their radar.
It's already happened. I installed a Linux machine here a week ago at where I work (a bank, so we know about the RH IPO). My boss knew what I was doing, and was cool with it, because he reads some tech journals.
The pleasent surprise came when he had a meeting with his boss. Guess what was asked.
"What about this new Linux thing?"
Bing, we had a machine up, down here in our little cubbyhole, and we could have showed him, except, well, he was busy. But manager types are noticing.
Now, if only we could get the federal government to make linux programs to use (talk about irony with the DOJ trial and writing windows software on the other end!)
I hope they see the use in BeOS, too. Everything has a place, even Microsoft. Even if it's just so we learn about our mistakes.
Thanks for your time.
Dan
I really hate when people take someone's or some company's net worth, divide it by some arbitrary # of people (usually the population), and say "Your share: $#"
Whatever. The Bill Gates Wealth Clock claims that he took over 350k$ from my pocket. The Red Hat Wealth Clock implies the same. Like a dollar in my pocket means a dollar out of someone elses.
/rant
> Wall Street has finally discovered what every nerd has known for the past five years: that Linux not only works - it works better!
... but thanks to consumers, VHS became the dominant brand.
... it doesn't. It just says alot of people think they can make money off buying Red Hat stock. And alot of people would be right - sound the alarms, its time for Linux to become the newest technical pin-up babe.
What a load of balony. The success of the RedHat IPO says not a single thing about the value of Linux as a good OS. People buy stock cause other people are buying stock cause other big companies are pushing it as the New Thing (tm). It looks like Linux is poised to become the next big thing in the IT world, but since we've seen it happen with Windows 95, we can't draw a line between the stock value and the power of the OS; only the stock value and the percieved market placement and possible success of the OS. Beta was better than VHS
I'm not bashing Linux, obviously; I use it myself. I'm trying to discredit the notion that success on Wall Street confirms the technical superiority of Linux
This is approaching dangerous levels of bandwagoning.
"Old man yells at systemd"
On the contrary, there seems to have been plenty of stockholder lawsuits against their companies. Admittedly I have no data about the outcome handy.
As for your Apples vs. Oranges example, if you can show that Apple Corp. (not the one in Cupertino!) management was grossly incompetent in their business strategy (or lack thereof) for competing against Orange Co. then perhaps you might have a case. Of course, surely you would do this as a last resort - ousting the board at the shareholders' meeting would be a better option. BUT, America - land of the lawsuit...
There is no off postion on the genius switch. - David Letterman
LIN-ux...as in Lynn-ux...rhymes with "Finn...."....based on the name "Linus...."
To be terribly geeky and quote Cmdr. Data..."One is my name...the other is not...."
RHAT is down over $10 today by the way.
A mere correction, or are people realizing this company does not deserve a market capitalization larger than Toys R Us?
I've heard stories that companies like Microsoft have $1B war-chests
that they rarely dip into....
Actually, Microsoft currently has over $20 billion sitting in its coffers. And no debt.
Cash is King.
E-Trade quite simply was not able to handle this sort of thing. They tried their best.
In the future do not invest through on-line brokerage accounts. You will not have the service when you need it (it is even legal for them to freeze your account for up to 60 days).
Transfer your accounts at E-Trade to a full-service brokerage firm. The extra commision you pay will be serve you much better over the long-haul. And, there is no fee to do a transfer.
If they can not handle a bevy of slashdot investors with questions, how are they going to be able to handle a market crash!?
If you want help or more info., e-mail me.
Shorting is a quick way to bury yourself by the way. You can't short a stock after its IPO, whether you got it at the opening or not, anyways.
"people made a lot of money on RHAT stock" - Really so if I got in on the IPO, then I can't short the
stock until 30 days by SEC rules right? so if it goes down to $25 I got (from $12.. ~doubled my money) not
some of these claims...
Or if I got in on the price of $47 dollars on IPO day and now its $67 ~ I made about 150% gain so what..
I think you either have very poor grammar skills, or very bad math skills... or maybe a combination, but this does not make any sense to me.
Despite this, I see no reason for this post to be moderated down to a -1.
While I am a huge advocate of a long-term buy, hold & accumulate philosophy. IPO's do not fall in this category.
Especially if you are a younger investor, and do not have a core holding of quality companies already.
If you took out your student loans, or barely squeezed out enough to buy your shares of Redhat, the responsible and best thing for you to do is sell.
Historically, IPO's have had less than a 5% average annual return over their first 10 years, and that is only counting the few that actually make it that long.
Sell the majority of your Redhat shares and invest that in a (or a few) quality company.
If you feel strongly that there will be huge profits in linux, invest in IBM, Intel, Compaq, Dell or any of the other more established companies that have begun to use Linux.
Redhat is not a safe investment... do not put your retirement money there.
I chagrins me to no end that 401k's are not self-directed, but I guess they are that way to protect idiots from losing all their retirement money... but then, isn't that what social security is for?
sorry to be anal...
While I have agreed with just about everything you have posted, it is a little general to just say that Price to Earnings Ratios have averaged around 20 (though I assume you wanted to keep your posts less than a full blown essay:). This differs (sometimes greatly) from industry to industry.
Brand name companies warrant a higher P/E. Technology and growth companies have similarily deserved higher ratios. Small caps will also typically have a high P/E ratio (which is why many say they are a great buy right now).
Historically, they have been going up... though not any where near a point to warrant some of the valuations out there. But historically, a P/E of 15 is considered normal, with 10 being low! You would be tough pressed to find any large-cap companies trading that low (with any growth prospects at all). This could be a result from the stock market slowly, over time, losing a lot of its risk in my opinion. Debate is open.
But the stock market does change. There was a time when a great sign to sell stocks was when dividend yields in dropped below or near bond yields. But in the 1950's this changed.
My only (small) point is that using 20 as a standard for rating P/E's is probably a mistake (albeit a minor one).
Ummm...isn't RPM already RH's proprietary installer? And I believe it already is GPL'ed as another distribution uses it also.
LRJ
So Red Hat is worth 5.6 billion. Anyone have an idea how this money will be spent? Obviously RH now has to walk the line between making it's investors in Wall Street happy and not angering off the (easily annoyed) linux community. According to the article it seems RH has been great towards the community, so can we assume that this means that a lot of money start flowing in to linux development? If that is so this IPO is A Good Thing indeed. Thumb
Doing what is in the interest of the stockholders only goes so far. They can only do for the stockholders what is legal.
Unless RedHat is willing to test the limits of the GPL, then there isn't much that the stockholders can do to hold the Board accountable.
"Rocky Rococo, at your cervix!"
I read the comments correctly. The limits to which RedHat can go in closing off distribution depend on the legal standing of the GPL. Since the GPL has never been tested (AFAIK) in court, this is still an open question.
Shutting down the FTP server is only one form of limiting the "free" exchange of the distribution. If I buy one copy of RedHat's disk and then send it in a round-robin fashion to friends and colleagues, I would be demininshing their revenue stream. Where does the distribution clause of the GPL end?
In short, only the courts would be able to limit the GPL and distribution of open source. The shareholders are mearly along for the ride.
"Rocky Rococo, at your cervix!"
Ummm... You either missed my point or you are ignoring it. I never said "copy" the CD. I said send it to friends in round-robin fashion.
I'll grant you that RH can come up with a million different strategies on how to restrict distribution of their Linux version but that would still miss the point - the impression that the GPL is inviolate.
Heck, since you've obviously given considerable thought on how to screw the consumer, let's try this one: RH purchases the rights to Conway Twitty's music. They burn one of his songs on a RH 7.0 CD and now the entire distribution is copyrighted against copying.
Of course this will not limit me from buying the said RH 7.0, installing the GPL-protected parts, then mailing the CD to a friend for them to do likewise (ala round-robin). The shareholders get nothing and I escape copyright enforcement.
What this proves is that the Linux-centric information is protected by the GPL. Currently, there is nothing to stop me from sending my legally purchased CD to as many friends as I see fit. The only way RH can plug this revenue hole is to fight the terms and conditions of the GPL. ONLY THE COURTS WILL DECIDE WHETHER THE GPL HAS MERIT - not the stockholders.
That was my original point.
"Rocky Rococo, at your cervix!"
My first exposure to Linux came in the form of a bundled shareware CD I purchased for $5US. The Linux release wasn't even 1.0. I bought a book on how to install and run Linux 5 years ago for $20US that came with 1.2.13. Two years ago, I bought a RedHat dist so that I could get glibc installed without spending countless hours with the mini-HOWTO.
In short, people have been making money off Linux for at least 7 years (by my own experience). The fact that RedHat has hit the jackpot shouldn't make a bit of difference to the developers (I know, wishful thinking). I am anxious, however, that the folks who have contributed the most to RedHat's windfall might be discouraged by the sudden rush of the public to own a piece of Linux. I fear that the "gold fever" that has ensued may spoil their enthusiasm and, eventually, their desire to contribute.
If there is any way I can convince those folks not to lose focus, let me at least try by making a few points.
1) Linux has given me the opportunity to use UN*X on a computer I could afford (i.e., an x86 PC). The unforseen benefit of my migration to Linux has been that I have been a participant in the explosive growth of an exceptional OS.
2) The fact that I can install Linux on as many machines as I can afford has given me the tools to build my own network.
3) I can scan across the globe and interact with people who have installed a world-class OS on scrap PCs. These folks have been able to enter the information age without having to mortgage their home in the process.
4) Distributions are available to fit user ability and NATIVE LANGUAGE without having to wait for Redmond.
For these reasons, and many more (so many they would hog bandwidth from their enumeration), Linux is a phenomenon that must succeed. Words alone cannot express the gratitude I feel for everyone who has ever posted a patch, beta tested a module, or has in any way been associated with Linux's success.
I can only hope that the individuals who have contributed to this success can see past the dollar signs. I am not a proficient programmer, so the only contribution I can make is to buy Linux-oriented products. I have done so in the past and will continue to do so in the future.
I don't want to go back to the dark days.
"Rocky Rococo, at your cervix!"
I got screwed by E-trade as well. One of their sales reps told me that RedHat was responsible for the last minute "re-ordering" fiasco. I don't know who to believe, RH or ET, but any opportunity to make E-trade SQUIRM sounds good to me.