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Dow Jones: Shares of Linux Firm Red Hat More Than Triple After IPO

Aug 11, 1999, 23:27 (13 Talkback[s])
(Other stories by Raymond Hennessey)

[ Thanks to Peter Crane for this link. ]

"Shares of Linux software distributor Red Hat Inc. more than tripled from their offering price in trading Wednesday, in stunning contrast to the current slump among Internet initial public offerings

"Red Hat, Durham, N.C., was expected to be one of the week's hotter offerings, though some analysts worried the offering wouldn't be as explosive at it would have been had it come a few weeks ago because of the overall downturn in the market's attitude toward technology issues and the glut of new issues in the pipeline."

"Red Hat has hovered around profitability for the past few years. In the company's fiscal 1999 ended Feb. 28, Red Hat logged $10.8 million in revenue for a net loss of $91,000. (Its net loss, including accretion on preferred stock, was $130,000 for the year.) The company reported net income of $8,000 on a little more than half the revenue the year before.

"However, losses have accelerated in recent months as Red Hat has ramped up its sales push. For the three-month period ended May 31, the company reported a net loss of $2.1 million on $2.8 million in sales.

"Based on the 66.8 million shares outstanding after the offering, Red Hat has an estimated market value of about $2.96 billion."

Complete story.