[plug] Red Hat Shares non-offer

[Bret Busby]

I assume everyone has heard about the Red Hat share IPO in the USA.

It appears that people who are Red Hat users, are not to be able to buy shares
in the company; only people who don't give a stuff about the company and its
interests; corporate share speculators.

I have tried to find whether IPO's (especially this one) are available to people
outside the USA.

The primary underwriter, Goldmans Sucks, aren't interested in providing a useful
answer to the question, E*Trade, who are another of the three underwriters, do
not respond to email (apart from not acknowledging email), the ANZ, who has an
"alliance with E*Trade", does not either acknowledge, or respond to email, and
Red Hat advised that they cannot advise on the matter. I sent an email to the
USA SEC, which approves IPO's, on Friday (Western Australian time), but have not
got a response (or acknowledgement)

So, this is the share offer that isn't. The stated purpose of the IPO, is that
the shares are supposed to made available in small parcels, to people who are
not speculators, who are interested in investing in the company, but, not as
speculators.

Such is life, I suppose.

Bret Busby
....................................................

      Rules undercut Red Hat IPO goodwill 
      By Stephen Shankland
      Staff Writer, CNET News.com
      July 28, 1999, 7:50 p.m. PT 

      A gesture of goodwill on the part of software maker Red Hat has generated
some ill will with the
      very people the company hoped to reward.

      Linux seller Red Hat had offered several open source programmers the
opportunity to participate in the
      initial public offering of the company's stock, which likely will take
place in the next two weeks. However,
      at least a dozen people who were invited to participate have informed
Slashdot founder Rob Malda that
      they've been rejected by E*Trade, the electronic trading company helping
with the IPO.

      It seems all that glitters is not gold in the high-tech industry, even
though stories of financial windfall are
      legion amid the scene of so many companies rushing to go public. The price
of a hot new issue often
      jumps markedly, and those who were invited in during the early stages can
make a big profit.

      "After I opened an account and moved my money, I was told that I'm
ineligible for the IPO because I have
      no stock-trading experience," one person posted to Slashdot, a discussion
group that's a favorite
      among Linux fans. "Isn't it ridiculous to 'invite' a bunch of Linux geeks
to buy Red Hat if only experienced
      traders are eligible?"

      But receiving the invitation letter isn't enough to guarantee that a
person can participate in an IPO, said
      E*trade spokesman Tim Alban. "There are certain investment profiles that
would make [some investors]
      inappropriate," he said. "This is for their own protection."

      The screening is required by National Association of Securities Dealers
regulations.

      People who applied to participate in the IPO were specifically warned on
E*Trade's Web site: "Public
      offerings are considered speculative investments, and therefore you will
be required to answer and pass a
      series of questions about your investment experience, goals, and your
financial background," Alban said.

      The notice of ineligibility gives a phone number at E*Trade where people
can call if they want to discuss
      the matter further, Alban said.

      Daryll Strauss, a Precision Insight employee, said he understood that
investment opportunities aren't
      open to anyone. "You've got to demonstrate that you know what you're
doing, that you're not putting
      your life savings on the line," Strauss said.

      Strauss added that he doesn't expect a huge number of shares to be
available to those who were offered
      the Red Hat investment opportunity. "I've done these things before, and I
suspect the offerings will be
      relatively small," he said.

      In open source programming efforts such as Linux, anyone can see, modify,
and redistribute the
      blueprints of a piece of software. While increasing numbers of Linux
developers are on the payroll of Red
      Hat and other companies, much of the Linux effort has been unpaid work
done in programmers's spare
      time.

      Red Hat spokespeople were not immediately available for comment.