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Technology Stocks : Red Hat Software Inc. (Nasdq-RHAT) -- Ignore unavailable to you. Want to Upgrade?

To: Pink Minion who wrote (577)	8/15/1999 10:52:00 PM
From: RobbRacer	Read Replies (4) \| Respond to of 1794

I cannot beleive people would consider buying this stock at this price. For those that do, the likelyhood of you getting burned is just must higher than making money. Not odds I would take. There are 4-5 other companies like Caldera that have just as an important role in the Linux revolution. They are just not public yet. Well not exactly. If you like Linux and want to bet on it you can buy SCOC which owns 25% of CALDERA. SCOC has sales of 214MM a year, a PE (remember what that means) of 19 and a market cap of 270MM. Very reasonable. RHAT has sales of like 12MM and a market cap of 6 BILLION dollars. I cannot understand how people can be so stupid! If you like Linux great. But don't pay 6 billion for a company that is not the clear leader (just the first public company), has no proprietary rights, and can be copied so easily. Some other important points on why this stock went higher which no longer apply. The affinity shares (about 800,000) were not available for sale until Friday after 3PM. If you were in their position with a four bagger you were very upset with the way ETRAde screwed with your delivery and will probably sell as soon as possible to lock up gains. Second,the convention was over friday and most of the media associated with it are now gone. Most everybody who wanted to and did buy this stock did so and it will be difficult to replace those with newer buyers at these prices. Third, the majority of shorters were / are not able to hit this stock until tommorow (primarily only offshore shorters could). This is because most US brokers will not allow shorting until they get delivery which is tommorow. Lots of people in the US want to hit this thing because of the ridiculous rise and valuations. Forth, momentum in this stock is waning and misleading. Most of the gains have been a result of the Market Makers gapping the stock rather than traders running it. The stock closed about 52 on WED and gapped to 58 on Thurday and momentum ran it to to about 71 (pretty strong).But on Friday almost all of the gains were from the MM's gapping it to 85 and it closed no higher. Daytraders made very little. Volume also dropped off by over 50% as the smarter traders left for new stocks to hit. So whos left to hold the bag?? The less savy traders and stupid retail investors who think stocks just keep going up not realizing all these other factors even exist. Then it will start getting ugly as the price will start to collapse. Remember the average trade size on Friday was less than 250 shares. Not exactly institutions or smart money. All retail!! Rob