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CBS Marketwatch: Linux stocks surge with IBM backing

Dec 13, 2000, 22:24 (1 Talkback[s])
(Other stories by Mike Tarsala)

"Shares of recently battered Linux-related stocks surged Wednesday after Lou Gerstner, IBM's chief executive, announced Tuesday that Big Blue will invest $1 billion in Linux next year...."

"Doubts are lingering that the Linux companies will be successful long-term. While it's clear that IBM will benefit from Linux hardware sales, VA Linux could be challenged in competing with Big Blue. It may be difficult for the Linux-related companies including Red Hat to compete for large service contracts. And profit from Linux software in 2001 may be elusive, at best."

"'This is more of a short-term impetus for the stocks right now,' said Keith Bachman, analyst with ABN Amro. 'We don't see the long-term trends for either VA Linux or Red Hat sustaining this rally.'"

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