Shares in Linux distributor and services company Red Hat Inc continued a two-day surge Wednesday, jumping $8.75, or 8.1%, to close at $116.75 after trading as high as $135.25. The move followed a $21, or 24.1%, gain on Tuesday fueled by new deals for the company and favorable stock ratings on Wall Street. The 34% two-day gain means the stock has risen more than eight-fold since August 11, when the stock debuted on the Nasdaq market by more than tripling from the $14 offering price. It also gives the Durham, North Carolina-based company a market capitalization of roughly $7.8bn.
The most recent upswing came on the back of a deal with Gateway Inc that will see the PC maker resell Red Hat’s version of Linux for its servers and an agreement to provide services to Burlington Coat Factory Warehouse Corp, which is rolling out a nationwide Linux-based network. In addition, investment banks Goldman Sachs and Hambrecht & Quist initiated coverage of the company with market outperform and buy ratings, respectively. Goldman was the lead underwriter of the company’s IPO and H&Q was a co-manager. News of Red Hat’s planned push into the Japanese market also helped boost the share price. Red Hat shares have continued to benefit from the fact that they are currently the only investment vehicle for Linux, as other Linux-related companies have yet to go public. á
