CNET News.com: VA Linux an example of stellar IPOs gone south

“In December, computer maker VA Linux set the record for the
largest gain in stock price ever on the first day of trading. The
company’s stock, offered at $30 a share by the company, soared more
than 697 percent to close at $239.25.”

“But VA has since seen its value drop by more than 50 percent.
The stock declined further yesterday to close at $108.63, despite
posting a second-quarter loss in line with Wall Street’s
expectations. In midday trading today, VA Linux was down about 2
percent to $106.25.”

“Despite the mix in results, analysts say Linux still
resonates with investors. With the growth of e-commerce, the
popularity of the upstart OS is expected to grow
as Web site
owners load up on more hardware and networking equipment. Linux
offers a way to cut costs.”

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