Red Hat stock is red hot

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

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