Red Hat Software Files to Raise $96.6 Mln in IPO (Update1)
|An SI Board Since June 1999|
Washington, June 4 (Bloomberg) -- Red Hat Software Inc., which sells a Linux operating system that competes with Microsoft Corp.'s Windows software, filed to raise as much as $96.6 million through an initial stock sale.
The Durham, North Carolina-based company didn't specify in its filing with the Securities and Exchange Commission the number of shares it would sell or their expected price range. Those details will be included in a future filing. The $96.6 million top value was used solely to calculate a registration fee.
Red Hat sells software products and services related to Linux, a computer operating system available free on the Internet that rivals Microsoft's Windows operating system. Many view Linux as a threat to Microsoft's dominance in personal computer and server operating systems. It's considered a viable alternative to Microsoft, which operates in more than 90 percent of the world's new PCs. Some users find the Linux software more reliable. ''This bears an acknowledgment that Red Hat has created an apparent market for Linux as a supported, pay-for product and is about to cash in on that,'' said Harry Fenik, an analyst at market researcher Zona Research Inc.
Red Hat counts well-known technology companies such as Intel Corp., Oracle Corp., Compaq Computer Corp., Dell Computer Corp., Novell Inc. and International Business Machines Corp. among its investors. Other large technology companies such as SAP of Germany, the No. 1 business-management software maker, and Dell, the top direct PC seller, have said they'll sell the Red Hat Linux software with their products.
10 Million Users
Linux was developed in 1991 by Linus Torvalds, who was then a student at the University of Helsinki and now lives in the U.S. The operating system has captured the imagination of software programmers and technology enthusiasts because it was modified and widely used by the programmers throughout the Internet community.
Linux has gradually been gaining acceptance as a commercially-viable operating system.
More than 10 million users run the Linux system and it was the fastest-growing server operating system last year, according to International Data Corp. It accounted for more than 17 percent of all computer server operating system shipments last year. ''The difficult times in terms of technology and managing end-user expectations are ahead, not behind,'' Fenik said.
Red Hat said it would use proceeds from the stock sale for general corporate purposes, including working capital and geographic expansion.
Underwriters for the stock sale will include Goldman Sachs & Co., Thomas Weisel Partners LLC and E*Trade Securities Inc. Red Hat has applied to trade on the Nasdaq Stock Market under the symbol ''RHAT.'