Investors bit 6 percent off Red Hat Inc. (Nasdaq: RHAT), one of the best known distributors of Linux software, after it announced a secondary stock offering Friday. A large chunk of shares will be sold by company executives.
Shares were down 6 1/16 to 92 9/16, below the stock's recent 52-week high of 151 5/16. The stock has been rocky since it missed estimates, but split its stock in December.
The offering of 4 million shares at $95 a piece will leave about 151.7 million shares outstanding in the company. The offering, filed with the U.S. Securities and Exchange Commission in mid-January, is being underwritten by Goldman Sachs, Chase H&Q, Thomas Weisel Partners, J.P. Morgan, and Charles Schwab.
The company will sell 2.75 million shares. The remaining 1.25 million shares are being sold by stockholders including Robert Young, the company's chairman, and Matthew Szulik, its chief executive and president, according to the prospectus filed with the Securities and Exchange Commission filing.
Reuters contributed to this report.