Red Hat to join index
Nasdaq-100 to list software company
Red Hat next week will become the Triangle's only homegrown company on the Nasdaq-100 Index.
The index, which represents 100 of the largest nonfinancial companies listed on the Nasdaq National Market, includes a range of industries, such as biotechnology, software and retail. Nasdaq officials review the index every December to keep it consistent with the market's largest companies. With a stock market value of $4.37 billion, the Raleigh open-source software company joins the likes of Biogen Idec, Cisco Systems, Dell, Starbucks and Microsoft on the index.Stocks joining the list include Internet search engine Google, online travel agency Expedia, video game maker Activision and retail chain Urban Outfitters. Stocks that will fall off the index include Dollar Tree Stores and Level 3 Communications. The changes will take effect after the market closes Dec. 16. "Investors, by the way they drive the stock price of companies, they determine who's in and out," Nasdaq spokesman John Jacobs told Bloomberg News. "For a company going in, it typically just reinforces good news." Red Hat officials had no comment about the change. The index will boost demand for Red Hat's stock, as funds that follow the Nasdaq-100 buy shares to match their holdings with the new list, said Meric Koksal, an equity derivatives strategist at Goldman Sachs. Red Hat's stock closed at $24.69 Friday, down 61 cents. The Nasdaq announced the index changes after the close of stock market trading. Red Hat's share price has nearly doubled over the past two years, although it is still down significantly from its heights of more than $130 in early 2000. After the tech bubble burst, the stock fell as low as $3.02 in September 2001. As a leader in selling Linux-based computer software and services, Red Hat is a clear fit among the "100 best names in technology and growth," said Brendan Barnicle, a senior research analyst at Pacific Crest Securities. "I'm hard pressed to see why somebody like Red Hat wouldn't be on there." Red Hat has built a lot of credibility, and the company has a lot of growth ahead, he said. "I think it's still early in the story for Red Hat," Barnicle said. Newsobserver.com |
