Red Hot Debut for Red Hat Stock

Does this make sense? The hot Internet stock of the moment is a company that distributes free software that anyone can copy. Red Hat, the biggest vendor of the Linux operating system, more than tripled Thursday in its public debut despite soggy markets that have forced other Internet companies such as Women.com to postpone offerings and, even worse, seen ones that go ahead like Mortgage.com "break" and trade below the offering price.

Powering the Red Hat stock? Excitement over a radical programmer movement known as open source that values cooperation over competition. Linux, originally cobbled together out of Free Software Foundation tools by then 21-year-old student Linus Torvalds, is the crown jewel of open source. Linux now claims to run more Web sites than any other operating system, including Microsoft Windows and Sun Solaris. Based in Durham, NC, Red Hat raised $84 million selling shares at $14 each. Red Hat's little revenue so far comes from sales of shrink-wrapped versions of Linux that start at $39 each, but there are plans to grow through support services and application development. Friday morning Red Hat shares were trading at $71, making Red Hat's co-founders Robert Young and Marc Ewing each worth $665 million. MORE >>