Linux hype sends Corel on tear
(All figures in U.S. dollars unless otherwise indicated.)
By Susan Taylor
OTTAWA, Aug 30 (Reuters) - Linux fervor continued to fuel
massive gains for Corel Corp. <COR.TO><CORL.O> on Monday as the
software developer basked in spillover from a U.S. rush for
firms associated with the operating system.
Corel touched a peak of C$10.25 in heavy morning trade
before backing off to C$9.15 on the Toronto Stock Exchange, a
gain of 85 Canadian cents, or nearly 11 percent. On the Nasdaq,
the issue gained 9/16 to $6-3/16.
That follows a climb of nearly 24 percent in Toronto on
Friday, when the issue gained C$1.60 to close at C$8.30.
The meteoric rise is linked with a market push for Linux
plays that kicked off on Friday.
Linux is an open-source operating system with 10 million
users that is seen as a rival to Microsoft Corp.'s <MSFT.O>
Windows. Corel hopes to launch its first Linux product in
November.
Corel's surge mirrors the performance of Linux software
firm Applix Inc. <APLX.O>, which saw its stock jump more than
65 percent on Friday followed by a gain of $4 1/2 to sit at $21
on Monday. The firm's similarities to red-hot Red Hat
Inc.<RHAT.O are cited as a cause for the climb.
In contrast, Linux software developer Red Hat, which
launched an IPO August 11 with shares priced at $14, fell
$3-13/16 on Monday to $76.
Corel benefited from a delayed reaction to Red Hat's
soaring stock price and the extended climb in Applix shares
said Duncan Stewart, fund manager at Tera Capital in Toronto.
"It's up on Linux and the Red Hat stuff," he said.
Corel stock had languished for many sessions following Red
Hat's debut but found new life last week after investors woke
up. "All of a sudden, it went up."
Corel Chief Executive Michael Cowpland predicted his
company would begin to swell on Linux enthusiasm in a recent
interview with Reuters. "I think the only reason that it hasn't
moved up yet is because we're not quite on the radar yet of
most of the U.S. analysts," Cowpland said.
In contrast to Red Hat, Corel is considered a bargain, said
John Hladkowicz, Corel's director of investor relations.
"I think that the Americans are finally recognizing the
potential that Corel has in the Linux space," he said. "There
aren't that many public companies in the Linux space, so if
you're going to play in Linux there just isn't much available."
Linux also made headlines last week with Sun Microsystems
Inc.'s <SUNW.O> purchase of Star Division, a software firm
which sells Linux and Windows versions of its StarOffice suite.
"It's been a gradual recognition of what we're doing here,
but it's certainly happening," Hladkowicz said.
($1=$1.49 Canadian)
REUTERS
Rtr 11:05 08-30-99 |
