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IT-Director: Red Hat's Success Provides an EmbarrassmentAug 17, 1999, 13:17 (3 Talkback[s])
(Other stories by Snark)
"Red Hat came to market at $14 a share last week and closed its first day up 270 percent at 52, grabbing headlines in the financial press. On the following day (Thursday) it rose a further 20 points and finished the week a further 13 higher at 85 1/4. This values Red Hat at above $5 billion. The success of the IPO will provide Red Hat with all the early funding it might need to pursue its business goal. Tipping its red hat to the open source community, to which it owes almost everything, Red Hat set aside, '800,000 shares of common stock for sale at the initial public offering price through a directed share program, to directors, officers and employees of Red Hat and to open source software developers and other persons that Red Hat believes have contributed to the success of the open source software community and the growth of Red Hat.'"
"The gesture was greatly appreciated and also excellent PR. However there were glitches with it. Some who tried to take advantage of the offer were denied the possibility by SEC regulations which imposes minimum requirements for participating in an IPO. Others were denied by E*Trade, Red Hat's brokerage partner whose web site kept giving would-be shareholders error messages. This is egg on E*Trade's face rather than Red Hat's."
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