[lug] Red Hat $ 217/share long or short?

[Michael J. Hammel]

Thus spoke Jeffrey B. Siegal
> "Michael J. Hammel" wrote:
> > I doubt the DOJ ruling had anything to do with the recent jump.
> 
> Actually, it did.  Immediately after the judge issued his finding that
> Microsoft was a monopoly and abused its monopoly power, the prices of several
> Microsoft competitors (including Red Hat as well as Sun and others) staged a
> major immediate increae and started on a major ramp.  Putting Microsoft in
> check like that greatly reduces the possibily of Microsoft pulling another
> "cut off their air supply" type stunt.

True, but that was a ramp up from about $60 to $80.  It doesn't really
account for the 160 point jump the week of Thanksgiving.

> 1. Intel as a major investor could not buy stock without SEC filings, if at
> all.  

Then another institutional investor.  I doubt the individual investors were
pumping it up 160 points in a week.  Unless you count people like Warren
Buffet as an individual investor (although I doubt he'd buy Red Hat).

> 3. Even with stock *much* lower ($50 or less), Red Hat has plenty of buying
> power to buy Applix or almost anyone else.  None of these Linux companies
> except the ones getting ready for an IPO (VA, Linuxcare, etc.) are worth
> enough to be out of Red Hat's reach. 

Depends on who they want to go after and how many they're want to buy.
Applix (if RH is actually interested in them) might not be the only company
they're looking at.  I suspect some other embedded companies (applications
providers, possible) may be in their scopes.

Remember that RH isn't just out to garner the desktop.  They're looking at
any place Linux might fit.  And that's a lot of markets.

> Another reason for the recent run up is the Cygnus acquisition.  That was a

True.  It gives RH a foothold in the embedded world.

> terrific deal for Red Hat.  Not only are the companies highly culturally
> compatible (which suggests limited departures by key employees), but for about
> 10% of their own market cap, Red Hat more than doubled their head count,
> increased their revenues by about a factor of five, and got development and
> support contracts with many solid gold technology companies who are long-time
> Cygnus customers (including Cisco).

Yep.  It was a real coup.  I never saw it coming.  I doubt many others did.
-- 
Michael J. Hammel           |
The Graphics Muse           |  Why do croutons come in airtight packages?  It's
mjhammel at graphics-muse.org  |  just stale bread to begin with.
http://www.graphics-muse.com