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Red Hat Is Now Part of the S&P 500

Soulskill posted more than 5 years ago | from the stock-build dept.

Red Hat Software 128

phantomfive writes "Red Hat has made it onto the S&P 500, an important measure of the stock market. It is replacing CIT, which is expected to go bankrupt after the government refused to bail them out. Red Hat is the first Linux company to make it on to the S&P 500. While this means little directly for the company, it is an indication of the importance Linux is taking on in the world."

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Let Me Be the First To Say... (5, Funny)

SilverHatHacker (1381259) | more than 5 years ago | (#28741039)

Congratulations.
Could this be the Year of the Linux Stock Market?

Re:Let Me Be the First To Say... (2, Funny)

oneirophrenos (1500619) | more than 5 years ago | (#28741051)

Yeah, congratulations to Red Hat for replacing a bankrupt company!

Re:Let Me Be the First To Say... (1)

Anonymous Coward | more than 5 years ago | (#28741149)

You seem to forget that RH was 501st on the list. It is more stable than at least one recent S&P company.
Probably there were more than one companies that fell from that list since the regression.
So, RH beat more than one. People who invested in the now bankrupt ones should have done better by investing into RH.

Re:Let Me Be the First To Say... (0)

Anonymous Coward | more than 5 years ago | (#28743679)

s/regression/recession/

Re:Let Me Be the First To Say... (4, Insightful)

jedidiah (1196) | more than 5 years ago | (#28741171)

How else do you expect it to happen? Really?

Yes. It just KILLS some people that Linux might be doing well or
Redhat might be doing well. They will go so far as to even try to
stir up some sort of artificial stock panic.

Regardless of how some lemming might want to spin it, Redhat was
slightly less important last week when compared to this week and
this week they are a part of the S&P 500.

Perhaps Redhat will be a little less subseptable to FUD now.

Re:Let Me Be the First To Say... (0)

Anonymous Coward | more than 5 years ago | (#28741353)

Susceptible. FYI. From Latin, 'sub' (below) and 'capero', as in 'capture'. Able to be captured from below, or something to that effect.

Re:Let Me Be the First To Say... (0)

Anonymous Coward | more than 5 years ago | (#28741363)

How else do you expect it to happen? Really?

By the way of the google: making zillons of bucks such that all other companies are pushed out of the my the sheer mass of the revenue.

Anyways, I wonder if this is really a good sign for linux or just a sign how fucked the US economy is right now.
Perhaps you shouldn't have outsourced everything (including call centers) to China and India.

Re:Let Me Be the First To Say... (2, Interesting)

Darkness404 (1287218) | more than 5 years ago | (#28741815)

The thing is though, there are only 2 other major OS makers who are publicly traded, that are in competition to RH Apple and MS. Even if Chrome, Ubuntu or SuSE ends up taking away a lot of RH marketshare, all RH has to do is take the ideas and code from them and add it to their product. On the other hand, MS can't exactly take code from OS X and neither can Apple take code from Windows.

Re:Let Me Be the First To Say... (1)

Hurricane78 (562437) | more than 5 years ago | (#28743793)

You clearly never have heard of BSD. ^^

It's their share pot for code, I guess.

Re:Let Me Be the First To Say... (4, Informative)

burnin1965 (535071) | more than 5 years ago | (#28744307)

there are only 2 other major OS makers who are publicly traded, that are in competition to RH

HPQ [google.com] HP-UX [hp.com]
ORCL [google.com] Solaris [sun.com]
IBM [google.com] AIX [ibm.com]
NOVL [google.com] SUSE [novell.com]

Looks like Red Hat has plenty of competition. Red Hat's business performance selling support services for their distribution of linux has been outstanding and their inclusion in the S&P 500 is well deserved.

Re:Let Me Be the First To Say... (2, Insightful)

MattXBlack (1534971) | more than 5 years ago | (#28744365)

Don't IBM and HP make operating systems?

Re:Let Me Be the First To Say... (0)

Anonymous Coward | more than 5 years ago | (#28743249)

Seems a day doesn't pass without reading about how someone is sure the Linux sucks, windows sucks, solaris sucks and will soon be deleted from every machine in the world, followed by *BSD.

It's tiring, childish, and unproductive.

Congratulations to Redhat, this is great news for them.

Re:Let Me Be the First To Say... (0, Offtopic)

oldhack (1037484) | more than 5 years ago | (#28742749)

Yeah, we keep it up, and S&P 5000 (mid-to-large cap) will soon shrink to S&P 2834 (any cap) and falling.

Re:Let Me Be the First To Say... (0, Offtopic)

ters a-zA-Z0-9$_.+!* (1177175) | more than 5 years ago | (#28741075)

lets start the next decade off right NEW TECH BUBBLE i'm too young to have had that fun in the 90's

Benefit of being in S&P 500 (5, Informative)

SpinyNorman (33776) | more than 5 years ago | (#28741073)

There is a benefit to stockholders since being in the S&P 500 creates instant demand - it means that all the S&P 500 index funds need to buy your stock!

Re:Benefit of being in S&P 500 (1)

morgan_greywolf (835522) | more than 5 years ago | (#28741443)

While being added to the S&P 500 may result in temporarily increasing the stock price, over the longhaul, it means practically nothing.

Re:Benefit of being in S&P 500 (2, Insightful)

bert.cl (787057) | more than 5 years ago | (#28741597)

Well, my theory is a bit rusty, but wouldn't this add some liquidity for the Redhat stock?

Might as well decrease as well if passively managed funds want to keep on to the shares, but going by gut feeling, I would think it's a good thing regardless. If anything, the share should be more correctly priced in the long run;

Depending on your definition of correct pricing of course.

Re:Benefit of being in S&P 500 (5, Funny)

oldhack (1037484) | more than 5 years ago | (#28741761)

Now the god damn commies are in my portfolio.

Just now? (1, Offtopic)

zogger (617870) | more than 5 years ago | (#28742159)

How many of the companies you own stock in trade with/do business in red china (or Viet Nam for that matter)? Or put it another way, how many *don't*?

Re:Just now? (2, Interesting)

osu-neko (2604) | more than 5 years ago | (#28742205)

How many of the companies you own stock in trade with/do business in red china (or Viet Nam for that matter)? Or put it another way, how many *don't*?

I believe by "commies" he was referring to actual communists. If there are any actual communists left in China these days, they're probably repressed by the Chinese government for advocating radical philosophies fundamentally opposed to that of the party. :p

Re:Benefit of being in S&P 500 (1)

Hurricane78 (562437) | more than 5 years ago | (#28743811)

Beware, for they might contaminate your businesses precious liquid assets!

Index funds (5, Informative)

andhar (194607) | more than 5 years ago | (#28741085)

Inclusion in the S&P 500 could mean some index funds will have to acquire some shares. Inclusion in an index is usually seen as positive, and falling out of an index is seen as negative, when index funds have to sell.

Re:Index funds (1)

ThrowAwaySociety (1351793) | more than 5 years ago | (#28741125)

As an interesting consequence, those of us who are invested in a typical S&P Index fund* now own a tiny part of RedHat. (We've long owned part of Microsoft, Sun and Apple) So now I can sleep well, knowing that I'm making Linux happen.

Hey, it beats being invested in most of the other companies that make up the S&P 500.

(*Or maybe not. Index funds are supposed to track the performance of indices, not necessarily the exact makeup of those indicies.)

Re:Index funds (4, Interesting)

larry bagina (561269) | more than 5 years ago | (#28741223)

Owning Red Hat stock doesn't make linux happen. When you (or the index fund) buys RHAT stock, that money goes to the previous shareholder, NOT Red Hat.

Re:Index funds (3, Insightful)

Meshach (578918) | more than 5 years ago | (#28741345)

Owning Red Hat stock doesn't make linux happen. When you (or the index fund) buys RHAT stock, that money goes to the previous shareholder, NOT Red Hat.

Not directly. But as more people buy stock in RHAT it means that Red Hat will be a more viable business and more people will put money into it. So indirectly Red Hat does get money.

Re:Index funds (1)

maxume (22995) | more than 5 years ago | (#28741769)

It's RHT now, they moved over to the NYSE.

The liquidity of a stock is a reflection of the viability of a business, not something that contributes to the viability of a business. A very weak or very strong stock can have some impact on the day to day operations of a company (for example, it can factor into acquisitions, and the attractiveness of options as compensation), but for the most part, it doesn't.

In order for new money to be 'put into' Redhat, the value of other shares has to be diluted (each share represents a claim on earnings; to put new money into the company, the company has to issue new shares). If someone buys some stock on the open market, they are buying existing shares.

Re:Index funds (3, Insightful)

dfn_deux (535506) | more than 5 years ago | (#28743253)

Also, being included in the S&P500 means that the increase in demand created by the associated index fund inclusion will (or should in theory) increase the per share value which has the resultant effect of increasing the over all value of the company as represented as the market capitalization. Larger market caps allow for much more leverage when negotiating financing on large business deals; not only by giving a greater perceived value but also by providing for more favorable rates on direct equity exchange deals.

P.S. I am not an economist and what I've posted above may be completely wrong... I'm working from very old memories of a 100 level econ course I took a long long long time ago.

Re:Index funds (3, Interesting)

prichardson (603676) | more than 5 years ago | (#28743877)

Not directly. But as more people buy stock in RHAT it means that Red Hat will be a more viable business and more people will put money into it. So indirectly Red Hat does get money.

Having a high stock price does not mean you have a viable business. Please remember the dotbomb bubble. Many businesses had completely ridiculous business plans yet their stock went through the roof. Then they ran out of money and the stock certificates were about as valuable as scratchy toilet paper.

I'm not saying this is true of RedHat, but PLEASE don't equate a high stock price with a viable business. If anything, a high stock price equates with the mere perception that the business is viable.

Re:Index funds (3, Interesting)

cetialphav (246516) | more than 5 years ago | (#28742043)

Owning Red Hat stock doesn't make linux happen. When you (or the index fund) buys RHAT stock, that money goes to the previous shareholder, NOT Red Hat.

That is true, but there are tangible benefits to RHAT. One of the ways they can raise capital is to issue additional shares. An increase in the stock price means that they can raise more money when they do this. This also makes the stock options that are offered to employees more valuable without costing the company a cent.
It also protects the company from a hostile takeover since any buyout becomes more expensive.

Re:Index funds (2, Insightful)

ceoyoyo (59147) | more than 5 years ago | (#28742389)

Red Hat issues stock. People buy that stock and the money goes to Red Hat. Since Red Hat hasn't issued any stock lately, if you pick some up you're buying it second had, but so what? You're still responsible for an investment in the company. That is, you gave Red Hat money (probably through many intermediaries) to develop their Linux distribution.

Re:Index funds (4, Insightful)

tnk1 (899206) | more than 5 years ago | (#28742449)

Yes and no. Directly, no effect on Red Hat.

Indirectly, Red Hat probably has a stock reserve that it maintains. Improving the price of their stock means that they can actually buy things with that stock, usually this is in the form of acquisitions. Many buyouts are done in the form of stock swaps.

Additionally, it makes their stock more attractive to give to employees/executives because its not some fly-by-night operation any more. Not that it was before, but some people like their certifications and industry recognitions.

In the end, it could potentially have a net positive effect on Linux, particularly if they use any advantage in a way that will help Linux, either directly or incidentally via side-effects of their corporate strategy.

A lot of what-ifs, but in the end, its nice to put a capstone on Linux success in the business world.

Re:Index funds (1)

ThrowAwaySociety (1351793) | more than 5 years ago | (#28742637)

Owning Red Hat stock doesn't make linux happen. When you (or the index fund) buys RHAT stock, that money goes to the previous shareholder, NOT Red Hat.

As other posters have already noted, buying and holding stock enhances the value of the company, which can be useful if the company ever needs to issue new stock, either through a public offering or as incentives to employees.

Even if the company never issues another share, management benefits from having people buy and hold its stock. Investing requires confidence in a company's management and strategy, so buying stock is akin to voting for the business model. What's more, institutional holders (like index funds) are generally pretty friendly to the recommendations of boards when votes come up.

(Frankly, I thought I'd get more comments about whether or not Red Hat actually had anything to do with "making Linux happen." )

Re:Index funds (1)

mysidia (191772) | more than 5 years ago | (#28744229)

The increased price is an ego booster, and the value is available to them indirectly.

More demand for RH stock means if they start selling/issuing some more stock, they can get more money from investors (at cost of reducing their stock price).

It may also mean more media attention, and thus, more buyers aware of Redhat products.

Re:Index funds (0)

Anonymous Coward | more than 5 years ago | (#28742921)

Remember there are also "Short SP500" index funds - they will now have to short the RedHat stock.

In the end it shouldn't matter anyway since the stock price will be determined by the earnings of the company. If the price goes up temporarily because of funds buying up, the stock immediately becomes that much less attractive to other prospective buyers vs. other stocks or bonds.

de-spin (5, Informative)

girlintraining (1395911) | more than 5 years ago | (#28741113)

Red Hat has made it onto the S&P 500, an important measure of the stock market.

First, the S&P members are selected by committee, not by merit alone. Companies are (usually) included because they have a high liquidity and are "representative" of their industry. Not that Red Hat being selected isn't good news, just understand they're not selecting it because of the "runaway success of Linux", but because Red Hat is representative of the overall health of this segment of the industry.

Re:de-spin (1)

kestasjk (933987) | more than 5 years ago | (#28741305)

Dunno, sounds like "an important measure of the stock market" to me. Seeing a linux company up there as a healthy company is pretty significant it would seem, if you weren't sure if they wouldn't be around to support their platform now you'd prob ably be pretty reassured

Re:de-spin (5, Informative)

morgan_greywolf (835522) | more than 5 years ago | (#28741483)

For Red Hat to be representative of their industry, they need to be a healthy and profitable company. While I agree that this doesn't necessarily point to Linux as a being a "runaway success", it is significant to note that Red Hat's flagship product is a distribution of Linux and the various open source tools from GNU, X.org, Gnome, X.org, etc, and that their other products that help to boost their profitable, like JBoss are also open source tools. So yeah, it's a big win for open source because it shows that you can make it to the S&P 500 by being an open source company. That puts things in proper perspective.

Re:de-spin (1)

maxume (22995) | more than 5 years ago | (#28741939)

Isn't more accurate to say that their flagship product is support for a distribution of Linux? I can't imagine they charge a great deal more than IBM or HP.

Re:de-spin (1, Flamebait)

girlintraining (1395911) | more than 5 years ago | (#28741961)

So yeah, it's a big win for open source because it shows that you can make it to the S&P 500 by being an open source company.

The index, industry, and business world in general, doesn't give two sh--s whether something is open source or not. It may be an ideological victory of sorts, but calling it a "big win"? No. It's like graduating from fifth grade and moving on to middle school... It might be a big deal to the kids involved, but to the rest of the world? Not exactly bragging rights. All that said, I really wish I'd had the money to invest in Redhat when it sent me its IPO e-mail several years ago for being an open source contributor. :)

Re:de-spin (2, Informative)

Vellmont (569020) | more than 5 years ago | (#28742631)

It's like graduating from fifth grade and moving on to middle school. It might be a big deal to the kids involved, but to the rest of the world? Not exactly bragging rights.

Right. Because the vast majority of companies eventually wind up on the S&P 500 list, just like the vast majority of people move from 5th grade to middle school.

Your attempt to downplay this is ridiculous. This may not be a big deal to "the rest of the world" (exactly how many things are a big deal when put in that context?), but it's quite a big deal for open source.

Comparing this to all the things it's NOT misses the point. That's a fools errand. What it IS is a recognition that a company based on open source software is a player in the large market. That's all people are trying to say here.

I wonder... (0)

fragmentate (908035) | more than 5 years ago | (#28741119)

...does the S&P 500 use Linux?

I seem to recall that NYSE does. Then again, I'm old.

They may have switched to Linux at some point.

I think too much significance is being given to this announcement. Linux has already been quite dominant on the web for some time now. But most people couldn't care less about what delivered their content. How would you even know? Aside from server side errors.

RedHat's best contribution is Tom Lane to PostgreSQL.

Re:I wonder... (2, Informative)

afabbro (33948) | more than 5 years ago | (#28741375)

...does the S&P 500 use Linux?

"The" S&P 500 is a list of stocks published by Standard & Poor's, a division of McGraw-Hill.

I seem to recall that NYSE does. Then again, I'm old.

NYSE, AMEX, or NASDAQ might, but "The S&P 500" can't (except in the sense of "do the companies in the S&P 500 use Linux," in which case the answer is obviously "yes, some do").

Re:I wonder... (1)

fragmentate (908035) | more than 5 years ago | (#28741487)

Good catch there.

When I wrote that I didn't stop to think about the difference between the S&P 500 and NYSE.

I was actually curious about McGraw-Hill, not the S&P 500 as an entity. It's moot now since we'll likely be moderated down anyway.

Re:I wonder... (0)

Anonymous Coward | more than 5 years ago | (#28741377)

Judging by the errors I get, I guess everything runs on Wind... ohhhh

Nevermind.

Re:I wonder... (1)

oldhack (1037484) | more than 5 years ago | (#28741829)

Damn right, you're old and senile. TFA says S&P 500 now includes Redhat. As for whether S&P uses Linux, no big deal one way or the other.

Not a true representation then (1)

grasshoppa (657393) | more than 5 years ago | (#28741127)

As linux is EVERYWHERE anymore. Just about every small business and up runs it in some capacity. It runs major businesses too. Everything from big iron to the embedded market runs linux in some regard. Hell, Cisco's ASAs run a linux kernel.

Were this a true representation, linux companies would account for 60%+ of the tech companies listed in the index. Which is a bullshit measurement anyway, so I'm not sure what that statement was supposed to mean.

Re:Not a true representation then (1)

thenextstevejobs (1586847) | more than 5 years ago | (#28741441)

Were this a true representation, linux companies would account for 60%+ of the tech companies listed in the index.

Well, it isn't necessarily just tech companies that make money. And plenty of tech companies have a whole host of Windows machines, and maybe a few Linux servers.

Also, I'd be interested to see if it really is 60%+ running off of Linux. A lot of companies use a little thing called Solaris, you know. Unfortunately, I doubt the BSDs make much of a dent...

Re:Not a true representation then (1)

thenextstevejobs (1586847) | more than 5 years ago | (#28741555)

Were this a true representation, linux companies would account for 60%+ of the tech companies listed in the index.

Wow I just re-read your quote and I was worried I was missing the sarcasm. But looks like you really are serious

Re:Not a true representation then (1)

iggymanz (596061) | more than 5 years ago | (#28741765)

"linux company" could mean there is a box running linux somewhere in the dozens of locations

less and less companies use Solaris, I make my living helping them to ditch it in favor of something else

Re:Not a true representation then (1)

wisty (1335733) | more than 5 years ago | (#28741501)

Google is a linux company. IBM is a linux company. I think they are both S&P 500. What's your problem?

Re:Not a true representation then (-1, Troll)

Anonymous Coward | more than 5 years ago | (#28741743)

Just about every small business and up runs it in some capacity. .

YEAAAAH! LET'S MAKE THINGS UP! WOOOOOOOOO!!!!!!!!!!!!!!!!

Re:Not a true representation then (0)

Anonymous Coward | more than 5 years ago | (#28742311)

Linux is everywhere and invisible to its users most of the time. Little wireless printservers, routers, HDTVs, etc... as well as most webservers.

RHAT will eventually be acquired by Oracle or IBM (0)

Anonymous Coward | more than 5 years ago | (#28741279)

Their market cap is only $4B, which either of those two companies could spend w/o blinking. I suppose a bidding war could drive up the price to twice that. Remember, RH also controls JBoss, Cygwin, etc.

The loser gets Novell.

Re:RHAT will eventually be acquired by Oracle or I (1)

morgan_greywolf (835522) | more than 5 years ago | (#28741535)

[citation needed]

shareholders have to approve (1)

ir (104) | more than 5 years ago | (#28741703)

Oracle and IBM suck ass

Not surprising (-1, Troll)

MadFarmAnimalz (460972) | more than 5 years ago | (#28741315)

Red Hat deserve their place amongst the corporate elite and are an excellent representative of the large enterprise IT market. In my experience, they bully customers just as well as other non-Linux open source companies, so good for them.

Red Hat bully customers ? (4, Insightful)

viralMeme (1461143) | more than 5 years ago | (#28741435)

"Red Hat .. bully customers just as well as other non-Linux open source companies, so good for them"

Where, how, please provided verifiable citations.

Re:Red Hat bully customers ? (0, Offtopic)

4D6963 (933028) | more than 5 years ago | (#28741933)

"Red Hat .. bully customers just as well as other non-Linux open source companies, so good for them"

[citation needed]

Fixed it for you!

Re:Not surprising (2, Insightful)

iggymanz (596061) | more than 5 years ago | (#28741741)

funny, my clients love Red Hat, most of them transitioned from Sun and it wasn't Red Hat who was the bully

Finally! (3, Funny)

Anonymous Coward | more than 5 years ago | (#28741361)

2009 - the year of Linux on the stock market

Next milestone - the desktop!

Re:Finally! (0)

Anonymous Coward | more than 5 years ago | (#28742233)

Linux is already significant on the desktop. The last estimate I saw was 2%. Given that there are probably about a billion computers on the internet, that means there may be up to 20 million Desktop Linux users. Sure larger companies like Apple and Microsoft can safely continue to ignore Linux users, but at this point the Linux desktop market is self sustaining. This means companies that specialize in desktop Linux applications will now find themselves in a niche with very little competition, and can be positioned to do well as it grows.

Re:Finally! (1)

petermgreen (876956) | more than 5 years ago | (#28744247)

The thing is combine
*the fast pace of linux development
*the wide variety of distributions
*the fact that many linux users are using it because it is free (in whichever of the two senses is more important to them)

and there doesn't seem much of a market for software that you have to pay for on linux.

CIT and moral hazard (3, Interesting)

benjfowler (239527) | more than 5 years ago | (#28741437)

Congrats on Red Hat reaching the big league. I've got a couple of mates who work for Red Hat, and they say business is booming in the downturn, because they're picking up a lot of business from people looking to save money through Red Hat's Open Source-plus-support way of doing things. I wish Red Hat luck.

Sadly, this doesn't seem to have been the case with CIT, whose criminally incompetent management decided that letting the Government bail them out, was a better business plan than running their business as a going concern.

Too bad Anglo-American culture is far too tolerant of failure, particularly in the business world. The fat cats need to be taken down a few pegs -- and serious repercussions for failure are needed.

The big problem with the government bailouts on both sides of the pond, is that the captains of industry are scum, by and large; and will find a way to be "too big to fail", and profit by bludging off people who pay their taxes and do the right thing. Thankfully, the chaps in charge in the US have let CIT fail. After all, private business are full of people who preach the benefits of free markets in the good times. The Obama administration are wise enough to allow them to be destroyed by the remorseless logic of the free market when they are too weak to survive.

Re:CIT and moral hazard (2, Insightful)

iggymanz (596061) | more than 5 years ago | (#28741947)

The Obama administration is the one propping up all manner of failed business models with "bailouts".

It isn't about Anglo-American culture so much as the culture of the banking cartels, whose dynastic families have a somewhat different ethnic background.....

Re:CIT and moral hazard (1)

benjfowler (239527) | more than 5 years ago | (#28742935)

That is not cool.

Re:CIT and moral hazard (1)

jmorris42 (1458) | more than 5 years ago | (#28741997)

> The Obama administration are wise enough to allow them to be destroyed by the
> remorseless logic of the free market when they are too weak to survive.

Being of the Libertarian bent I have to like the idea of failure being reintroduced to the market. But I'm also a bit queasy when the current anti-market administration bails out it's friends (look at his economic team) on Wall Street and then allows CIT to fail. The question I instantly asked myself was Why? And why was it's failure so under reported?

Like probably everyone else here I didn't know anything about CIT till I was channel surfing last nite and heard a nasty little factoid. Yes it was the hyperactive Glenn Beck but once I had the idea it didn't take long to confirm it in the more reputable WSJ:

"The company is a source of funding for thousands of small and midsize businesses. It's also a big player providing cash advances to clothing manufacturers and suppliers, and credit to retailers to pay off invoices. The impact could be especially acute in California because of the state's large apparel-import business."

So mega industries and financial titans (who caused the economic mess along with Congress) get bailed out and the major financier to small business, where most new jobs come from, goes out. Folks, don't expect the recession to be ending any time soon. And I'd be shocked if unemployment doesn't hit 15% nationwide. 20% if we pass cap and trade and nationalize the medical industry.

Re:CIT and moral hazard (1)

benjfowler (239527) | more than 5 years ago | (#28742303)

Folks, don't expect the recession to be ending any time soon. And I'd be shocked if unemployment doesn't hit 15% nationwide. 20% if we pass cap and trade and nationalize the medical industry.

Hey, if there's THAT much blubber to cut from the US private healthcare industry, then clearly, that's a massive misallocation of resources that needs to be put to better use, like investing in education.

Some tough, hard-headed, pragmatic decisions have to be made. And it appears only Mr Obama has balls big enough to make them.

The fact that useless, balding baby boomers are getting heart bypasses, angioplasties and dick pills because they're too lazy and stupid to look after themselves properly -- while 45 million Americans have zero health coverage... is _not_ exactly a ringing endorsement of the current system.

Duplication and waste, after all, isn't the exclusive preserve of the public sector. Just ask the big arms manufacturers.

Slash and burn, baby. Bring it on.

Re:CIT and moral hazard (2, Insightful)

jmorris42 (1458) | more than 5 years ago | (#28742525)

> Hey, if there's THAT much blubber to cut from the US private healthcare industry, then clearly,
> that's a massive misallocation of resources that needs to be put to better use, like investing in education.

You misunderstand. What I'm talking about is the headwind small business is heading into. Break it down. You run a small business, here is your future. Your major source of financing just went out, payroll taxes are about to go up a minimum of 8% (play or pay provision in the health 'reform' bill) on your entry level employees... on top of the recent bump in the minimum wage and the prospect they will soon unionize. Another major hit will be coming to your bottom line when all energy sources jump. And if you manage to keep your door open your income is about to taxed at over 50% when you take this new 5+% surtax into account. And more tax increases are coming, including the return of the dreaded death tax. Meanwhile consumers (your customers) are also losing jobs, pulling back spending and generally hunkering down for a long downturn. So how many new employees will you be hiring in that environment? That is why I'm predicting unemployment will keep going up.

For unemployment to start dropping somebody has to start hiring beyond replacement. Large business is shedding workers, small business is currently in a holding pattern and will probably start dropping people. The only sector adding jobs is government and every government job is a net drain on the economy. Hate on business all you want pal, but good luck asking a homeless guy to hire you.

As for education, we can waste twice what we currently spend and gain nothing. Break the union and we can get improvement with current or even lower funding. Break the entire system of government schools and we can be #1 again.

Re:CIT and moral hazard (1)

benjfowler (239527) | more than 5 years ago | (#28742923)

I'm not an economist, so I'm not really qualified to say whether or not all these upcoming changes really will sink small business collectively.

I'm inclined to think that the reality will be slightly more complex than businesses being forced to the wall, or a double-dip recession, like a lot of people are predicting.

Pressures, if any, will apply across the board. Rising wages may challenge small and medium sized businesses -- but will crucially increase consumer spending power... a huge part of the US economy. Business which can't cut the mustard will disappear or be acquired, making room for business that can.

Besides, small businesses in other countries, e.g. the UK, continental Europe, my native Australia cope fine where there are death duties, payroll taxes, universal healthcare, etc. Predictions of Armageddon are somewhat premature, I think.

I don't think that a payroll tax supplement for small businesses who don't want to take out private insurance is such a bad thing. I remember reading something in the financial press recently, that a couple of small businessmen (registered Republicans, I might add) testified in committee in Congress, saying that they were getting buggered rotten by private health insurers, and were virtually begging for a public option to pay into, to contain costs and increase certainty to help them plan their budgets.

In the countries where I personally have direct experience with small business, healthcare is single-payer, and there's zero chance of a private health insurer turning around and raping your business prison-style, by jacking up insurance premiums.

Anyway, that this debate really boils down to, is whether or not I, as a small businessman or private individual, is getting value for money. I've travelled a lot, and I've found there's little correlation between overall "efficiency", and the degree of public intervention in the economy. France, for instance, has a huge public sector, but some parts of life there are dramatically more efficient and better-run than free-market Britain, where you can never get to work on time, because the overpriced, privatized trains never run on time.

(Next time I pay £200 a month for my train ticket, and then get told that the train isn't running because the "wrong kind of snow fell", or there are "leaves on the tracks", I'm going to punch somebody in the face.)

The whole public-vs-private thing is way overhyped. I think it's the willingness of everyone to identify and tackle inefficiency that's the issue here. Certainly where I'm sitting, the States has an issue, where everyone's too busy being Simon-pure liberals, conservatives, libertarians, whatnot, to revisit their assumptions, and throw out what doesn't work.

Call Obama what you will, but what I admire about the man, is that he is brutally pragmatic, and has repeatedly expressed the desire to go with what works and throw away what doesn't (e.g. CER research).

Lying Shitbag (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#28743275)

You are a lying shitbag. There, I've said it.

"Millions of Americans have zero health coverage" is a bold lie. If you can crawl to the ER or dial 911, you have health coverage. It's not great. It's not preventative care. However, you're covered.

If you want to see government health care, go to a VA hospital. I dare you. I know you're too cowardly to admit it, but the government has fucked that up by the numbers. Ask a veteran what they think of government health care. Ask someone who's married to a soldier. Ask a sailor why he's trying his damndest to get his kids to an off base provider.

But no, you won't. You'll continue to believe what Obama tells you because you're a yellow fucking coward.

Re:Lying Shitbag (1)

benjfowler (239527) | more than 5 years ago | (#28743637)

Lol, somebody forgot to take their meds this morning.

Or perhaps they should avail themselves of a health system that actually works.

Re:Lying Shitbag (1)

benjfowler (239527) | more than 5 years ago | (#28743693)

Oh, and showing up to the emergency room or dialling 911, after your unmanaged diabetes has made you go blind and your feet rot off, does not qualify as "coverage".

Not in a first-world country at least.

The "coward" line is absolutely, gut-bustingly hilarious, coming from an internet tough-guy Anonymous Coward.

The stupid, it buuuuurns!

Re:CIT and moral hazard (1)

benjfowler (239527) | more than 5 years ago | (#28742679)

"The company is a source of funding for thousands of small and midsize businesses. It's also a big player providing cash advances to clothing manufacturers and suppliers, and credit to retailers to pay off invoices. The impact could be especially acute in California because of the state's large apparel-import business."

Having family in the rag trade, I can just imagine what struggles small businesses dependent on credit from companies like CIT are going through.

Irresponsible companies like CIT who trade dodgy credit instruments and make bad loans make out like bandits in the good times, and hold us all to ransom when they get hit by the downside. It's not like these bastards are too stupid to realise that in a financial crisis, all correlations go to 1...

People like AIG and CIT are punks. They are "too big to fail", because they happen to supply the liquidity that a lot of SMEs need to operate. SMEs are the real generators of jobs, and what's bad for them, is bad for the economy, period.

CIT can go to hell. I feel badly for the collateral damage though, because it's going to make life much harder for a lot of mom-and-pop shops out there.

Re:CIT and moral hazard (1)

yoshi_mon (172895) | more than 5 years ago | (#28742955)

Being of the Libertarian bent I have to like the idea of failure being reintroduced to the market. But I'm also a bit queasy when the current anti-market administration bails out it's friends (look at his economic team) on Wall Street and then allows CIT to fail. The question I instantly asked myself was Why? And why was it's failure so under reported?

Keep in mind that the TARP bailout was enacted and originally administered by the Bush administration. Rough estimiates where that fully half of the bailout was done by Bush's Secretary of the Treasury Henry Paulson.

I'm not going to excuse the Obama admin of doing everything perfectly however when people like yourself omit rather large facts in your argument it does nothing for your creditability.

Profit motive is good for Linux (1)

cryfreedomlove (929828) | more than 5 years ago | (#28741455)

The incentive of profit and personal gain, as evidenced by the commercial success of Red Hat, is helping Linux to gain traction against Microsoft Windows. How ironic. This open source blend of passion, underdog romanticism, genuine need, and profit motive is an awesome story and it must have Bill Gates shaking his head in disbelief.

This *IS* important to the company (1)

financialguy (680124) | more than 5 years ago | (#28741461)

"While this means little directly for the company..."

Not true. Inclusion in a widely-invested index almost certainly means an increase in the stock's price, all things being equal. This will be most visible up front as index fund managers buy in (because they have to). But there will also be a much larger base of investors that hold this permanently insofar as they hold S&P 500 index funds (or ETFs, CTFs, etc.). This could directly provide the company more "currency" to make purchases of other firms (by paying in stock), as well as give it an advantage in attracting and maintaining talent that are partially compensated in stock (assuming they award stock/options).

It could also result in more stock analyst coverage which would bring valuable publicity to itself and its shares, and likely also more "mind share" for Linux for the average investor that follows this sector/industry.

Too big to fail now! (1)

DriedClexler (814907) | more than 5 years ago | (#28741491)

So how long until Congress debates whether they have to give Red Hat lots of free money on the grounds that they're "systemically important" now? :-P

Re:Too big to fail now! (1)

bkpark (1253468) | more than 5 years ago | (#28741655)

I'm more worried about when they will appoint themselves as the overseer of RedHat because they represent "systematic risks" that need to be managed—i.e. you are getting too big to fail, so we are going to make sure ... that you fail before that happens.

Actually it is significant (2, Insightful)

seifried (12921) | more than 5 years ago | (#28741523)

A lot of mutual funds/index funds/etc. will now be buying and holding Red Hat stock, as well as other large institutional investors (i.e. large state pension funds/etc.). Same mentality as "no one ever got fired for buying IBM computers", it's not like fund managers are much good at this (witness the melt down in almost every mutual fund/hedge fund), most of them just follow the herd.

Congrats Red Hat (1)

motang (1266566) | more than 5 years ago | (#28741799)

Who says Opensoruce doesn't make money!?!

Revolution Revelation (1)

mindbrane (1548037) | more than 5 years ago | (#28741863)

Somewhere in the idle backwaters of my life I've a copy of 'Revolution OS'. I can't remember the year it came out but /. was big on it, probably because Taco had a cameo. Redhat and linus were the darlings of the show with RMS doing a walk on but the punchline was the big noise the Redhat IPO made, followed but the nearly instantaneous downward spiral of it's stock price. Redhat, like Linux has stood the test of time and can rightly take a place on the S&P. Linux, like Redhat has gone from a wunderkind, to a dicey proposition, to a viable, entrenched market player. So maybe the 'Revolution OS' has come full circle and is ready to move on with a new face, but hopefully one still mired in remnants of Dungeons & Dragons lore.

Oracle is First Linux Company on S&P500 (1)

flyingfsck (986395) | more than 5 years ago | (#28742013)

Oracle has a Linux distribution that is remarkably similar to Redhat's and they have been on the S&P500 for a while.

Re:Oracle is First Linux Company on S&P500 (1)

pembo13 (770295) | more than 5 years ago | (#28742339)

Oracle does not have a Linux distribution. Centos is more of a Linux distribution than Oracle.

Re:Oracle is First Linux Company on S&P500 (1)

Kickasso (210195) | more than 5 years ago | (#28742759)

You can download something called "Oracle Enterprise Linux" from Oracle's servers. Looking at the name, I conjecture that it's Oracle's, and that it's Linux. Are you absolutely positively sure it's not a distribution?

Re:Oracle is First Linux Company on S&P500 (1)

JonJ (907502) | more than 5 years ago | (#28743081)

Seeing as "Oracle's Linux" is just a copy of Red Hat, I'd say Red Hat was the first Linux company on that list, no matter how you spin it. :)

Re:Oracle is First Linux Company on S&P500 (0)

Anonymous Coward | more than 5 years ago | (#28743755)

Oracle has a Linux distribution that is remarkably similar to Redhat's and they have been on the S&P500 for a while.

That's because they downloaded RHEL 5.3 source code, took out Red Hat trademarks and labeled it Oracle Enterprise Linux 5.3. I'm not saying it's a bad product but I wouldn't go around saying that Oracle is a major Linux OS maker just because of that.

Red Hat Enterprise Linux may be Linux... (1)

macs4all (973270) | more than 5 years ago | (#28742213)

...But it is about as far away from FREE Software as it gets.

In fact, is it even technically Open Source either?

From the Red Hat [redhat.com] site: "Available for immediate download starting at $80."

Um, 80 != 0, right? So, why would the F/OSS community trumpet this as a "win"?

Re:Red Hat Enterprise Linux may be Linux... (1)

poet (8021) | more than 5 years ago | (#28742647)

...But it is about as far away from FREE Software as it gets.

In fact, is it even technically Open Source either?

From the Red Hat [redhat.com] site: "Available for immediate download starting at $80."

Um, 80 != 0, right? So, why would the F/OSS community trumpet this as a "win"?

Yes it is. You can download the sources for free. You can also download a white box clone called CentOS. There is *nothing* that says you can't charge for Open Source.

Sure its free. Download CentOS or the Sources. There is *nothing* that says you can not charge for open source.

Re:Red Hat Enterprise Linux may be Linux... (1)

Antique Geekmeister (740220) | more than 5 years ago | (#28742841)

Not quite completely free: RedHat's "RHN" service, for example, takes a paid subscription and is incompatible with non-RedHat clients. Also, their work on "GFS" is not entirely open source, at least at my last review of it, primarily because its original authors had not open sourced it for various reasons.

But RedHat is very good indeed at returning their tools to the free software and open source worlds: they're a model of how to do so and actually add value.

Re:Red Hat Enterprise Linux may be Linux... (0)

Anonymous Coward | more than 5 years ago | (#28742905)

"Not quite completely free: RedHat's "RHN" service, for example, takes a paid subscription and is incompatible with non-RedHat clients."

Actually, spacewalk is the upstream open source version of RHN and is compatible with other OSes:
https://fedorahosted.org/spacewalk/

"Also, their work on "GFS" is not entirely open source, at least at my last review of it, primarily because its original authors had not open sourced it for various reasons."

GFS code is available:
http://mirror.centos.org/centos/4/csgfs/SRPMS/

Re:Red Hat Enterprise Linux may be Linux... (1)

Kickasso (210195) | more than 5 years ago | (#28742671)

Remember, price has little to do with freedom.

You can download (most of) RHEL sources from RHT servers, recompile, rebrand and make your own RHEL clone. There's a popular distro (CentOS) doing exactly that, and a few more obscure ones. Oracle Enterprise Linux, a direct competition of RHEL, is also based off RHEL sources. If that's not "free" and "open source", I don't know what is.

Re:Red Hat Enterprise Linux may be Linux... (2, Funny)

Datamonstar (845886) | more than 5 years ago | (#28742949)

Look, see, It's sorta like this. Say I was to buy you a beer. And that beer would be free. To you. And then you could drink it. And get drunk, I suppose. And then, if I was drinking my beer that I had to pay for then I'd be drunk as well eventually, and then, well...

I just forgot what I was going on about, but I really could use a beer right now.

Re:Red Hat Enterprise Linux may be Linux... (1)

armanox (826486) | more than 5 years ago | (#28743585)

Open Source != Free
Also, CentOS, Scientific, Oracle, and CERN Linux are all RHEL rebuilt from the open and freely available source code. Fedora Linux, Red Hat's testing ground, is completely Free and Open both in binary and source.

Remember, Open Source means the source, not the binaries.

Oh Really? (1)

DaveV1.0 (203135) | more than 5 years ago | (#28743357)

While this means little directly for the company, it is an indication of the importance Linux is taking on in the world."

Prove that statement with verifiable facts.

This news actually means a lot for Red Hat's stock (1)

The-Perl-CD-Bookshel (631252) | more than 5 years ago | (#28743443)

This is fairly significant because passive investors such as S&P index funds, which are popular investment vehicles, will be purchasing shares for their portfolios. This will add more liquidity to the market for Red Hat shares which should help them garner more positive attention from investors. During these times of high volatility, the purchasers of stocks are constantly asking themselves, "if I get into a stock, will I be able to get out?"

Lost Opportunity (2, Interesting)

flipper9 (109877) | more than 5 years ago | (#28743897)

Back in the early days of RedHat, they used to be located in a non-descript office park in the Raleigh-Durham area. I remember working for an obscure Sales Automation company and our office was located upstairs, where if you turned to the left you'd head into our office and if you turned right you'd enter the small RedHat Software offices. I used to pop my head in occasionally to this company that was making this stuff called "Linux", and even asked for help when I was secretly setting up a Linux server at my company's office to replace our Windows NT 3.51 server.

If I had only turned right when heading into work instead of turning left when walking up those stairs, I'd today be a millionaire. :(

While this means little directly for the company (1)

whereiswaldo (459052) | more than 5 years ago | (#28744159)

While this means little directly for the company...

Really, it means little? Large companies tend to prefer, and even require, doing business with other large companies. Being on the S&P 500 is an indication of Red Hat's size and staying power, and thus should increase the desirability of other large companies to do business with it. Wouldn't you think?

Re:While this means little directly for the compan (1)

mysidia (191772) | more than 5 years ago | (#28744279)

It's true. Comes with a downside (for the Open Source community) that other companies may begin to look at the possibility of an acquisition...

How many years before we see an article that says something like "Microsoft to buy Redhat", "IBM to buy Redhat", "VMware to buy Redhat", or "Oracle to buy Redhat" ?

Conceivably someone bigger whose market Redhat represents a threat to, could seek to buy them in order to just kill their product line, and make sure Linux never has a year of the desktop. That's one of my worst fears in all this.

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