“Shares of Red Hat Inc., surged 40 percent to levels analysts
called ‘nosebleed territory’ Thursday, giving the distributor of
the Linux operating system a market capitalization of nearly $5
billion a day after its debut.”
“Analysts said Red Hat’s IPO was so well received — especially
during a major downturn in the Internet IPO market — because it is
the leader in the emerging market of Linux software. Linux is a
version of the UNIX operating system created by Finnish programmer
Linus Torvalds. It now competes with Microsoft Corp.’s Windows NT
in some areas such as running Web servers and e-mail servers.”
” ‘It is an early mover in what is obviously a hot area,’ said
Paul Bard, an analyst with Renassiance Capital Corp. in Greenwich,
Conn. ‘I think what investors are betting on is the growth of
the market for the Linux operating system. Lots of people think
this could be really big.’ “
” ‘It’s a completely different business model (from other
software companies),’ said Bard at Renaissance Capital. ‘You really
can’t compare it on a valuation basis. This is open source code.
They don’t own the code.’ “