Red Hat Stock Splitting

zerOnIne writes "ZDII has a story detailing that Red Hat plans to split their stock on a 2-for-1 basis, sometime about January 7. " The story also talks about Red Hat filing a 3.6 million dollar loss on a revenue of 5.4 million. Sales were up 24 percent from this time last year.

This is not news

I'll go ahead and take away my +1 bonus because i'm about to say somehting that's not nice about redhat. Well, not redhat... But just because everyone here owns Redhat stock, that doesn't make this a newsworthy event... Stocks split all the time. It changes nothing. You get twice as many shares but they're all now worth 1/2 as much. They do this to "make the stock more accessible to the smaller investors" which means nothing because anyone can buy a single share of the stock... and if you can't squirrel away $200 for a single share of the stock, you shouldn't be buying up stocks anyways... Show your support for the company by buying their products instead.

Damn stocksplits...

Perhaps we should move #redhat to UnderNYSE... Their servers don't suck so f***ing much...

Growth is 24 percent versus last quarter

A couple of folks have misreported this (including Slashdot). Third quarter growth is 24 percent from the previous quarter. The growth is 63 percent compared to 3rd quarter of last year.

Re:This is not news

This is very inaccurate. A stock split is good for the stockholders for several reasons.

First off, the smallest amount of change that can occur in a stock is 1/16 of a dollar- called a "teenie" in wall-street speak. Think about what this means- originally there were 60 million RH shares, now there are 120. If the stock moves at the minimum possible delta, you make twice as much money when the stock has split. It doesn't sound like much, but once it has split 2:1 four times you are talking rounding up (or down) a whole dollar/original share every time the price moves. That's a lot of capitalization on a technicality.

Another reason the price matters is that many people are shallow enough to think that since RHAT is going for 236 and MSFT is at 110, RHAT is overvalued. They don't always look to see that there are 5.174 billion microsoft shares out there, compared to the 60 million rhats. (because msft has split a dozen times or more)People are more likely to buy 50 shares at 75 than 50 shares at 250- that is just human nature.

I can surely think of more reasons, but my office is starting a Christmas party and if I don't run I will miss the apple pie... yumm...

Rev. Nehemiah

Here's why it's news

It's just one more milestone in the mainstreaming of Linux, and people like to hark those milestones with fanfare. Linux is officially big enough for a company selling it to split its stock.

And besides, there are legitimate reasons for splitting one's stock: avoiding the impression of overvalue, reducing the violent swings in value that correspond to changes of a few percentage points, increasing the pool of stockholders to broaden the holdings, etc.

The Wisdom of the Market

Ah, the wisdom of the stock market! What does this consist of? About three quarters of the men and probably half the women in the country, making bets on matters they know nothing about. Just think of all these people, and how much they know about Linux and computers, corporate finance and macro-economics. If you think this adds up to close to nothing, you may be right. For now they are all merrily marching in one direction, on the golden road to unlimited wealth. But mobs of uneducated people are not necessarily the safest bunch to fall in with. I'll stick to coding and get rich the old-fashioned way.