Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Angels of Alchemy -- Ignore unavailable to you. Want to Upgrade?

To: Smart_Money who wrote (9725)	8/24/2000 12:39:33 PM
From: ColtonGang	Read Replies (1) \| Respond to of 24256

LNUX has turned the corner.......``They had a blowout quarter,'' said Chase H&Q analyst Walter Winnitzki, who reiterated his ``buy'' rating on Sunnyvale, California-based VA Linux. ``This is the third quarter in a row where they've shown sales significantly above expectations and knocked down the loss compared with expectations.'' VA Linux's Sales rose to $50.7 million from $7.84 million a year earlier. Its loss widened on acquisition costs to $47.5 million, or $1.15 a share, from $9.19 million, or $1.17. Excluding the acquisition-related costs, the company said its loss would have fallen to $4.08 million, or 10 cents, from $7.87 million, or 34 cents, a year earlier. On that basis, VA Linux was expected to have a loss of 15 cents a share, the average estimate of six analysts polled by First Call/Thomson Financial. ``Model Works'' The company has seen its sales of Linux software grow despite Linux's free availability, Winnitzki said. Akami Technologies Inc., which sells a service to move Internet data faster, is VA Linux's largest customer, and Web site and TV programming operator CNET Networks Inc. also is a client, he said. ``Investors are coming around to see that the company's business model works and there is a path to profitability,'' Winnitzki said. He estimated that the company will be profitable at the end of next year, and perhaps sooner if the sales keep rising and losses decrease. Prakesh Patel, a WR Hambrecht & Co. analyst, increased his rating on VA Linux to ``strong buy,'' from ``buy.'' Patel predicts that the stock will reach $60 in a year. ``They are seeing significant growth because Internet companies -- Internet service providers and Internet infrastructure companies -- are still growing very rapidly,'' Patel said yesterday. Linux, Microsoft Companies such as Microsoft Corp., the world's largest software maker, don't open the code to their programs. Linux supporters say letting developers freely use and change a product improves its reliability and use. Linux has gained already in the market for computer servers running Internet sites and corporate networks. Microsoft held the lead last year for new server operating systems shipped, with 38 percent running Windows, while Linux-based systems were second with 25 percent of new shipments, according to Framingham, Massachusetts-based research firm IDC. One of the challenges for Linux supporters is to create enough easy-to-use programs so that consumers will be willing to buy systems running the program, analysts have said. Microsoft's Windows runs on 88 percent of all personal computers, while only 4 percent run Linux, IDC said. Shares of Red Hat Inc., which also sells Linux software, rose 1 15/16, or 8 percent, to 24 3/4. Corel Corp., a Linux software maker, rose 5/16, or 9.9 percent, to 3 15/32. Caldera Systems Inc., which makes software and training systems for Linux users, rose 5/16, or 5.7 percent, to 5 13/16. Both VA Linux and Red Hat have tumbled this year. VA Linux reached a record high of 320 on its first day of public trading Dec. 9, and Red Hat set its record high of 151 5/16 a day earlier. VA Linux has rebounded from its record low of 26 1/2 reached just three weeks ago. ©2000 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.