VA Linux storms Wall Street with 698 percent gain
Shares in the maker of Linux-based servers soar more than eightfold, setting a new record for the largest first-day gain of any initial public offering.
Shares in VA Linux priced yesterday at $30, but when they became available on the public markets today, the first trade was for a whopping 299.
"VA is the mother of all price pops," Richard Peterson, an IPO analyst with Securities Data, said of the opening trade.
Soon after the initial trade, the shares climbed to 320. When the dust settled, VA Linux shares had slid back to close at 239.25--a stunning 697.50 percent gain that sets a new record in a year that has been dominated by high-flying IPOs.
VA Linux Systems sells computers, primarily servers, that run Linux, a Unix-like operating system. It was developed by Linus Torvalds and countless other programmers and has made its way into the product lines of the world's biggest computing companies.
The dramatic rise in the stock eclipsed TheGlobe.com, which previously held the record for the largest first-day gain with a 606 percent increase.
VA Linux, which trades on the Nasdaq under the ticker "LNUX," also broke the record for the most money raised by a Linux-related company--collecting $132 million by selling 4.4 million shares for $30.
The company expected to sell its shares for $11 to $13. Due to high demand, it later raised estimated price to $21 to $23 this week. The shares eventually sold for $30.
The performance
Collab.net, Caldera Systems, Linuxcare, SuSE and TurboLinux are just some of the privately held Linux companies that may jump aboard the IPO train in the near future. Caldera, for example, was rumored to be shopping around for investment bankers to take it public and TurboLinux may go public next year.
Linux stocks were hotter than usual today as several companies wedded to the open-source operating system climbed in late trading. Andover.Net, a news, programming and software site that went public yesterday, was up 23.27 percent today to 78.13.
Corel, which has begun selling a version of Linux designed for novices, was up 38.4 percent today, closing at 39.19. eSoft, which makes Linux-based servers, climbed 7.64 percent to 37, and Red Hat, the Linux seller that sparked the Linux IPO frenzy in August, was up 5.53 percent to 286.25.