The recent slump in confidence in technology stocks seems not to have had an adverse effect on Red Hat Software's initial public offering (IPO) in the US.
The open-source software vendor launched its IPO of 6 million shares of common stock yesterday, and watched the share price triple over its offering price in early trading.
Shares opened at $US46 and climbed to $52.06 by late afternoon -- much higher than the offering price of $14 per share. Dow Jones estimated Red Hat's market value at $US2.96 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 research firm IDC.
One analyst said Red Hat's IPO should not necessarily be compared to recent ones from other high-profile technology companies, which have been largely Internet-centric.
"I think the reason Red Hat is making a little more success is that it's not an Internet IPO," said Jonathan Eunice, an industry analyst.
"The success of their business could be greatly affected by success on the Internet -- because its most interesting commercial use is by ISPs and ASPs (application service providers), the people who run the Internet and Internet applications -- but it is a product company," Eunice said. "They sell something that is not just a diffuse hope that the Internet changes everything."