"Remember a few years back when Apple Computer kept hemorrhaging
dollars and its share price bottomed out? The media circled over it
like vultures, drooling over its misfortune. Well, Apple just
announced blowout profits for the second quarter in a row, and it's
initiating a stock split. Almost all the analysts covering the
stock rate it a buy or strong buy. No, that isn't Linux news, but
those circling vultures remind me of the way some killjoy observers
are licking their chops over the descending prices of the erstwhile
high-flying stocks of Red Hat, Andover.Net, and VA Linux Systems.
Linux, some are quick to extrapolate, has seen the end of its short
"Maybe it's just human nature to kick folks when they're down.
But let's get a little perspective and try to remember the
disbelieving euphoria -- euphoric disbelief? -- that accompanied
Red Hat's opening day takeoff a million years ago during the August
1999 LinuxWorld Expo. Did anybody think then that the price could
really stay that high? Ditto for the market debuts of Andover.net,
VA Linux, and Cobalt Networks. Caldera's respectable but far from
spectacular IPO in late March of this year had a more realistic
feel to it. So how scary for the future of Linux is the fact that
all those stocks have been trading recently at below IPO
"Being about as savvy about the stock market as Bill Gates is
about sharing source code, I asked Jim Garden, vice president of
finance and technical services at Technology Business Research,
what he thinks the Linux stock freefall is all about. He pointed
out that if you look at the trends for dot-com IPOs over the past
year, hundreds of those companies' stocks are down from 60 percent
to 80 percent off their peak. Linux companies, then, are "not
alone in this situation where sky-high run-ups on their IPOs have
all of a sudden come down to earth," Garden said. "Now their
valuations are going to be built more on potential and earnings
rather than on hype and spin."
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