The recent slump in confidence in technology stocks seems not to have had an adverse effect on Red Hat's initial public offering (IPO).
The open-source software vendor launched its IPO of six million shares of common stock yesterday, and watched the share price triple over its offering price in early trading.
Shares opened at $US46 and hit a morning peak of $50 - much higher than the offering price of $14 per share. Dow Jones estimated Red Hat's market value at $2.96 billion.
Red Hat is the leading vendor of the Linux open-source operating system, which is becoming an increasingly popular alternative to Microsoft's Windows software on corporate network and Web servers. Open-source software such as Linux is built by unpaid developers over the internet, freely distributing and modifying the code. Red Hat has a 49 per cent share of the Linux market, according to IDC.
Whether other Linux-centred companies can follow Red Hat's path to a strong IPO remains to be seen. German Linux distributor SuSE GmbH may be next to try; it recently acknowledged its own steps toward the common-stock milestone.
Red Hat originally announced plans for its IPO on June 4. Goldman, Sachs & Co. is serving as lead underwriter, with co-managers Thomas Weisel Partners, Hambrecht & Quist and E*OFFERING.
Red Hat can be found on the Web at http://www.redhat.com.