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Smart Partner: Red Hat Needs Money Man

Aug 02, 2000, 22:07 (0 Talkback[s])
(Other stories by Joseph C. Panettieri)

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"Talk about bad timing. During an interview earlier this month, Red Hat CEO Matthew J. Szulik told me that the company needed to keep top managers on board--or it would have a tough time competing with rivals like Sun and Microsoft. Less than a week after the talk, CFO Hal Covert walked out the door to join SGI. Investors panicked and dumped Red Hat shares."

"Take a look at Red Hat's July 17 SEC filing (I certainly did), and you'll find that the panic was justified."

"According to the filing, Red Hat's "future success depends on the continued services of a number of key directors and officers," including Covert, among others."

"Red Hat has since downplayed Covert's departure. And CEO Szulik genuinely impressed me during our chat. In the interview, Szulik predicted that Red Hat would start generating profits by calendar year 2001. It will take a savvy CFO, however, for Red Hat to make good on that prediction."

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