Red Hat Stock Tumbles on Oracle Discount Support Offer -- Redmondmag.com

Red Hat Stock Tumbles on Oracle Discount Support Offer

By The Associated Press
10/26/2006

Shares of Red Hat Inc. tumbled nearly 30 percent Thursday as investors abandoned the stock on news that software juggernaut Oracle Corp. will move more aggressively onto Red Hat's turf.

Oracle's brawn poses a large threat to an undersized Red Hat, which has long benefited from a relative shortage of competition in the Linux sector.

Unlike Microsoft Corp.'s market-dominant Windows operating system, Red Hat distributes the Linux system for free. The company makes money by selling service and support.

Oracle CEO Larry Ellison announced Wednesday that his company will offer support for Red Hat's products -- with a 50 percent price discount.

Analysts sent out a series of downgrades for Red Hat. Soleil Securities lowered its Red Hat price target to $11.50 from $19.

"Current and prospective Red Hat customers now have an alternative for support from a larger, more experienced vendor and can easily convert their support contracts to Oracle, save money, and receive more important benefits ... " wrote Credit Suisse analyst Jason Maynard. He downgraded his price target to $14 from $29.

Red Hat shares plummeted $5.80 to $13.72, a 29.7 percent decline, in morning trading on the Nasdaq Stock Market.

Featured

Choosing the Right SSID for Your Network

Attracting attention, whether through a default or funny Wi-Fi name, could lead to a security issue.
Microsoft Outlines Latest Security Efforts at Ignite

In the wake of last year's CrowdStrike incident, Microsoft has worked to publicly rehabilitate its security image through new initiatives and public commitments to improve. That push continued this week at Ignite, where Microsoft announced a handful of new security tools and updates.
Nadella on Copilot: 'Major Platform Shifts Are in the Air'

As should be no surprise, Copilot took center stage during Microsoft CEO Satya Nadella's keynote speech to open Microsoft Ignite 2024.
Azure AI Foundry Revealed at Microsoft Ignite

Microsoft is consolidating its Azure generative AI tools into a unified platform named Azure AI Foundry.
Microsoft Bolsters Fabric at Ignite

While Fabric has improved in the year since its release, there are still some glaring issues with the platform.