Caldera set its IPO price at $14 per share yesterday, raising $70 million and making it the fifth Linux company to go public amid Wall Street's embrace of the rebel operating system.
The stock traded as high as $33 earlier in the day on heavy volume. It closed the regular trading day at $29.44, up $15.44 from the IPO price.
While a 110 percent increase is nothing to sneer at, it still falls short of the trading debuts of rival Red Hat, the first Linux seller to go public, or fellow Linux companies Cobalt Networks, Andover.Net and VA Linux Systems. Whether or not this means the investor momentum behind Linux is fading, there likely will be a great deal of speculation and analysis over the stock's performance today.
Linux is an operating system developed by Linus Torvalds and a host of other programmers in a cooperative "open-source" effort. Linux competes with versions of Unix from Sun Microsystems and others, Microsoft Windows and now "embedded" operating systems for powering non-PC devices.
Like a lot of Linux companies, Caldera isn't profitable yet. It had revenues of $553,000 and a net loss of $5.5 million for the quarter ending Jan. 31.
Caldera won't be the last company to try to convert investor enthusiasm for Linux into money to fund aggressive expansion in a new and fast-growing market. Linuxcare and LinuxOne both have filed to go public, but the bankers underwriting their IPOs haven't yet scheduled when public trading will begin. LinuxOne raised the hackles of some in the Linux community when it filed to go public six months ago. Linuxcare offers technical support, training, customization and other Linux services.
In addition, Lineo, CyberNet Systems, TurboLinux and SuSE are expected to go public later this year. And already public companies such as Enlighten Software, Santa Cruz Operation, Applix and Corel are remaking themselves into Linux companies. Other companies such as TiVo or eSoft base their special-purpose computers on Linux.
If Caldera's trading today is anything to judge by, investors are being more cautious this time around. Its closing price of $29.44 is 110 percent above the IPO price.
By comparison, shares in Linux seller Red Hat jumped 272 percent in its first day of trading in August. Shares of special-purpose server maker Cobalt surged 482 percent during its first day in November. Andover.Net, a Web site for Linux programmers and other technically savvy people, jumped 250 percent in its first day in December. And VA Linux, a Linux computer maker that is acquiring Andover.Net, set an IPO record with a 698 percent gain in its first day.
Other Linux stocks were down today. VA Linux, the most notable victim of a general decline in Linux stock prices in recent months, dropped $6.81, or 7.85 percent, to close at $80.
Caldera sells two versions of Linux, one for desktop computers and one for servers. In addition, the company plans to begin selling e-commerce software to make Linux better suited to sophisticated server tasks.
One of the big beneficiaries of Caldera's IPO is Ray Noorda, former Novell chairman. Noorda owns approximately 73 percent of the company's stock, according to SEC filings.