Login Sign up Help Search
Home Advice Experts Consultancy Monetise your contacts
Business Television
Business TV Channels
Business TV Series
Business Experts
Business TV blogs & news
Results Team
yourBusinessChannel
About
Contact
Help
Press
Privacy

Bob Young's remarkable business development story: RedHat stock value triples on launch day
Featuring...

  • Bob Young
    Founder of lulu.com, entrepreneur and record breaker on the NYSE...
Founder of Lulu and RedHat Bob Young explains how RedHat broke New York Stock Exchange records on its first day of trading:

Back in 99 we understood that Red Hat, we had this great momentum in the market but we were not being taken seriously by the world's major corporations and they were the people who were buying most of the technology. We understood that we could give away our code but our business opportunity was to sell support services to all the world's major corporations who needed this code. We were aware quietly that they were all using it internally but none of them were willing to stand up publicly and admit to using it because they didn’t really understand open source as well as they needed to and the world didn’t understand it. So by going public in 99 we were able to reassure everyone that Red Hat’s open source in general was a viable and in fact a much better way of doing technology engineering than the previous proprietary only model.

So in the summer of 99 we had the opportunity to go public and we went public and did our hard work with our investment bankers to value what we thought the stock was worth when we went public but of course this was in the peak of the .com year and the market how should we put it, was dramatically more enthusiastic about Red Hat stock than we had any reason to believe. On that day we set the record at the time, it has since been broken several times. But we set the record for the highest first day close above our offering price. I think our offering price on a split adjusted basis was about $7.00, we closed at about $22.00 at the time on a single day. It was a very odd feeling. So on one hand we knew we were doing very well, we expected the market to be very receptive to our stock and so personally we were thrilled with the success we had as businessmen. But at the same time we were concerned because the problems with your stock prices is that it sets expectations, The rest of the financial world now starts watching you saying are these guys really worth $22.00.

The next thing for us here we are or the team at Red Hat, I am no longer responsible for them, but today they are in fact trading above $22.00. So clearly it was in fact worth that ramp up even though we didn’t condone it. We priced it at $7.00 knowing that we could build a great business around this and it would some day be worth one day more than $7.00 and it is. So as an entrepreneur I take a lot of pride the team at Red Hat has in fact achieved the opportunity that the stock market recognised in 99.
Use these links to tweet, bookmark and share shows on your favourite websites like Facebook, MySpace, StumbleUpon and Digg.
Share/Bookmark/Save
Subscribe to RSS
Use these to add to your blog or website.
Embed
Link
Sign up to put YOUR biggest business problems to the experts. Join today and receive a free Results Team Accelerator worth US$375.00.

(fields marked * are required)

Firstname*

Lastname*

Your email address*

Password*

Confirm Password*

Your mobile / direct number*

Business name (if any)

Please describe your business / product / idea in detail, including history, growth to date, market demand etc*

Websites / URL(s) we should review to understand more*

Please describe the issue(s) and the opportunity in detail*

What could the outcome be if you were successful with this?*

Any other details which are relevant*

Where did you find/hear about us?

terms and conditions