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Salon: After the fall [VA Linux and Red Hat stock slump]

“If you’ve been reading the headlines you might think that the
entirety of Silicon Valley is in a panic, as the stock market
teeters precariously to and fro. Not so, or at least not
visibly.”

“Few companies fit the role of poster boys for the stock market
roller coaster of the last six months better than Linux start-ups
Red Hat and VA Linux. Acclaimed as Wall Street’s darlings after
their stunning 1999 public offerings, both companies have of late
been plagued with an unremitting stream of bad press as their share
prices have declined. VA Linux is currently trading at $39, down
from a high of $320. Red Hat is at $26 — call it $52 to account
for a split, but that’s still down significantly from a pre-split
high of $151.”

“Both companies also lumber under the additional burden of being
treated as canaries in the Linux gold mine. Red Hat’s IPO was
widely considered a validation of the commercial potential of
Linux. But its stock price slide is now hailed as proof that there
is no money to be made in the entire Linux sector.


Complete Story

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