“Shares of recently battered Linux-related stocks surged
Wednesday after Lou Gerstner, IBM’s chief executive, announced
Tuesday that Big Blue will invest $1 billion in Linux next
year….”
“Doubts are lingering that the Linux companies will be
successful long-term. While it’s clear that IBM will benefit from
Linux hardware sales, VA Linux could be challenged in competing
with Big Blue. It may be difficult for the Linux-related companies
including Red Hat to compete for large service contracts. And
profit from Linux software in 2001 may be elusive, at best.”
“‘This is more of a short-term impetus for the stocks right
now,’ said Keith Bachman, analyst with ABN Amro. ‘We don’t see the
long-term trends for either VA Linux or Red Hat sustaining this
rally.'”