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Cobalt IPO Opens...High
GrenDel Fuego was the first to write with the news of Cobalt's rather succesful IPO. It's gone from 22$ opening shares to a now current of 146$ per share. You can check where it's currently at as well.
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Someone out there care to shed some light on these contradictions?
Maybe you should read Mackay's classic Extraordinary popular delusions and the madness of crowds
Volume 2
Volume 3
Do yourself a favor and don't try chasing this stock at these levels. You could easily end up as road kill. Sentiment in the market is decidedly bullish as compared to the sentiment at the time of the Red Hat IPO. Buy it on pullbacks if you think you must own it. Or buy Red Hat as an alternative if you must play the Linux theme. (Disclosure, I own Red Hat).
These are important questions for anyone following this stuff...
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... they have a good product and I would guess pretty solid margins. They are doing all the config and setup for dedicated web boxes. I have one doing, DHCP, NAT, DNS, firewall, webserving, e-mail, all with what amounts to a point and click interface (and a bit of hand tweaking). My box has been up for 5 months solid after one reboot (my bad) out of it's box.
I think the Home Web Server(tm) will become more common as families set up their own e-mail boxes, and a family web-page on a dedicated pipe. Since the same box can also serve to share a 'Net connection and act as a firewall it's quite a deal. Plus, and this is a big plus, they look dang cool, especially in the dark. (I'm talking about the Qube not the Raq)
Good product + looks cool + runs Linux = big IPO
+&x
If a hardware company that shows losses is worth SO much....
Why was IBM so low a few years ago?
Why did Apple drop to sub $15...it was loosing money too.
http://www.pelagius.com/AppleRecon/991001a.html
With quotes like:
The markets have been "living on borrowed time with borrowed money" ever since the first
Fed rate cut in the fall of '98.
the Fed will assiduously remain in "Full Blown Bubble Protection Mode."
And greed is not a "Bad thing" as long as it's kept in perspective. But the majority of the people are not
keeping it in perspective. That's the reason why so many are willing to push a lot of stocks way out of whack; the most
telling are the Internet stocks.
It may be a New Market, but markets cycle, and the higher the upside, the lower the downside.
If it was said on slashdot, it MUST be true!
While RedHat is building brand identity in the Linux distribution space, I believe Cobalt is in the business space that ultimately will change the world: turning the server into a commodity.
If the basis for stock price/market valuation for an Internet/dot-com/etc. is really based on expectation of ability to significantly change the computing world a la Netscape (rather than mere celebrity value), I would bet my money on Cobalt rather than RedHat.
I believe this was in the New Yorker. One of those one-paned cartoons.
A bum sits on the street holding a sign that says "Spare a dime?". He is totally ignored. Look down the street a half a block, and a man is sitting on the street with people crowded around throwing money at him in large amounts. He is holding a sign that says "SpareADime.com"
Just goes to show that in some economic climates you get a feeling that you just can't lose. I think that the stock price for a lot of those high tech companies is vastly overvalued, and therefore bad for the economy, but investors do what they want to, because the stock market and the economy are not driven by rational decisions, but by greed.
I think RedHat is a fabulous company, and of course I wish I had bought their stock when it IPO'd, but I think that even though it's fallen significantly from its highs right after the IPO it's still overvalued. Same with these Cobalt clowns - I don't mean to come down on the company really, I'm just thinking that you can expect their stock price to take a nosedive, and then straighten itself out and begin rising steadily probably in the $80 range or so if Redhat has taught us anything.
One thing is for sure: In IPO land, unless you get in right at the offering price, it sounds like speculative day trading to me. I guarantee many people are going to lose their ass because of cobalt stock within the next 2-3 weeks because of profit takers realizing that the market has gone irrationally high on the price and taking their profits.
David
-- Truth goes out the door when rumor comes innuendo. -- Groucho Marx
Looks like it's taking RedHat up with it. I'm betting a simular thing will happen when LinuxCare IPO's.
If only I had enough money set aside to actually ride the wave.
-- I'm the root of all that's evil, but you can call me cookie..
Well, now Cobalt (having shipped 17,000 servers) is kicking the crap out of SGI in terms of market cap. Those guys really should put out a high-end Linux server appliance anways. Cobalt/Rebel.com have not even come close to sewing up the market, and the SGI boys have more than enough engineering expertise. --JRZ
So why do companies continue to go public at ten to twenty dollars, and then watch as that stock zooms to fifty, a hundred, or even more? They are losing lots of capitalization, by letting all of the investors "flip" the stock, right? That money should go to the company, right?
Because they have to price it "realistically".
Cobalt is a $100 million company... that is within reason. $700 million.... well...
A lot of it does go to the company however; because the top executives hold the majority of those shares, and there is nothing stopping them from selling their own poersonaly shares andretaining that capital for company use.
Well, for the average investor it is very, very difficult to get shares at the offering.
They go to institutional buyers and top clients of the underwriter's brokers.
A lot of the online brokers will have a lottery system where you might luck out and be able to get 100 shares... but generally you will only get offered crap. If you do not purchase the crap, a lot of times you lose the chance to get anything that is good. Though I am of the opinion that online brokers are a mistake.
After these shares are issued at the offering price... the holders then have the oportunity to sell those to the general public (the stock market essentially). Usually not too many shares are issued... and if there is a lot of demand for the company, the price has to rise in order to meet that demand. So you see what is called a "Gap Opening". The price instantly goes from $22 to $139... there is no in-between.
That is all the stock market is: Supply and Demand.
Keep in mind that there has to be a seller for every buyer in the market. If there are more buyers, the price has to rise to a level to incite more people to be willing to sell their shares in order to meet the demand of those who want to buy the company.
In the short term, the market is driven on these emotions... and very hard to predict (over 90% of day traders lose money).
The only way to make real money... and continually do it is to buy, hold and accumulate quality companies (at reasonable levels of course).
Do not waste your time with IPO's... they are a losing game. Even when you can get them. In fact, of the Initial Public Offerings that have "made it" (companies are still in existance), they have a combined average annual return of around 4% over the past two decades. That is meager at best.
According to quicken It opened at $139. It's only around 144 (did I just say "only"?). So you couldn't make the big money like you could have with RHAT. Unless of course you could have bought the IPO. I know I couldn't so this isn't a big buy for me. I'll wait till it comes down to around 80.
;)
It looks like we are shifting from the dot.com companies to the free/open source companies.
Steven Rostedt
Steven Rostedt
-- Nevermind
Even so, I reckon it'll do well. I think the market is finally realising that there -is- such a thing as a free lunch, if you include stone soup. Distributed efforts make for better bets than closed, isolated companies, in their ivory towers.
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)
So, it's not only US investors who are insane but it applies globally.
In Finland the allocations in IPOs are much more fair than in the US: All public is usually allowed to participate and the "public investors" quota is more or less evenly allocated to all the participants. In this case, everyone got only 25 shares :)
Please keep in mind that we are dealing with a rare market... IPO's are rarely this strong. Infact, the last time thre was this much demand for IPO's was the last 20's (not to sound too ominous).
Even in today's market, for every great IPO, there are 20 other duds.
The fund is also not quite what you think it is.
The majority of it is not actively invested in IPO's per say... but companies like Amazon, E-Trade and Radio One.
In the past 3 months (a very good IPO market), the fund is actually down 6%.
I'm hoping that they will when they show off their distro at Comdex -- Cowpland is talking right after Bob Young, so I have hope.
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Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
The stock market (as far as the Internet and high-tech sectors are concerned) is no longer fueled by company profits, strong market forcasts and innovative products. The stock market is now one big giant casino.
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In Vegas, you can get a hotel room for $15 at a semi-decent place, a tasty lobster and filet mignon dinner for $8, only because the market is fueled by gambling. The casinos inside the hotels make enough money to cover every other expense incurred by the hotel. Drinks are free, room and board are almost free, which would put a normal hotel out of business. But the casino keeps them in business.
Wall Street is Silicon Valley's great big casino. The market's desire to gamble away it's money on stocks (big money, big money, come on Black 47!!!! Papa needs a brand new bag!!!) keeps the Internet company's in business. Look at Amazon.com. No profit. What's that? That's right, no profit. None. At all (AFAIK). If an autmobile company posted 4 straight years in the red, they would GO OUT OF BUSINESS. Even if they did own their own stock, that would only hurt them. But as long as an Internet company owns some of it's own stock (i.e. has a cut of the casino's earnings) it doesn't need to worry about profits (charging for drinks and lobster.) But this ONLY applies to high-tech for some reason. Imagine if Exxon lost tens of millions ever year, maybe even every quarter. Their stock price wouldn't soar at each SEC filing. It's amazing. An Internet stock will jump as much as %20 at a bad earnings report. As long as they lost less than analysts predicted (Jimmy the Greek.) "Yes, we lost $250 million dollars this quarter, but analysts predicted that we would lose $270 million, and that justifies our stock jumping from $12 to $159 per share." It makes no sense, and eventually, people are going to figure this out. When people start selling their stocks to cash in on their Internet wealth, the value will drop dramatically because there simply isn't enough value in the average Internet company to justify the outrageous prices of the average Internet stock.
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Well, I had an order in to pay as high as 50/share but, needless to say, that probably won't execute.
For those frusturated about not getting in (as I am), I've been looking at this:
They claim to leverage their "institutional" nature to get in on IPOs, plus they also invest in recently-IPO'd-companies. Could be a way for some of us to get a piece of the pie.
At least this shows strength for Linux-related companies. Hopefully VA and Andover will see such success...
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Life if possible, art at any cost.