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IPOs a mixed bag
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August 11, 1999: 3:20 p.m. ET
Red Hat blows its top while Blockbuster sits flat in first day of trading
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NEW YORK (CNNfn) - Shares of upstart software distributor Red Hat jumped 229 percent while leading video renter Blockbuster was flat in their first day of trading Wednesday, pointing to the fickle nature of the market for initial public offerings.
In a widely awaited IPO in the high-tech sector, Red Hat Inc. shot up 32 to 46 after pricing at $14 per share. The price was at the top of an upwardly revised range of $12 to $14.
Goldman Sachs was the lead underwriter. Red Hat, the leading distributor of the Linux operating system, an open-source platform some observers say could challenge Microsoft's Windows OS.
Meanwhile, indicating how investors are going to pick and choose companies based on their growth prospects, shares of Blockbuster Inc. (BBI), the top video rental company, were unchanged at 15.
The Dallas-based chain, controlled by media giant Viacom (VIA), priced 31 million shares Tuesday at $15 each, below an expected range of $16 to $18. Salomon Smith Barney and Bear Stearns led the deal.
"It's a large offering, so it's going to take a lot to move it," said Steve Lacey, editor of IPO Reporter, noting that 161 IPOs priced from May to July -- a record total for a three-month span. "And it's not the best environment in the world for IPOs."
As for Blockbuster's sluggish open, Lacey said he wasn't surprised. "This is a company in a declining industry, but they are far and away the leader. The fact that it's holding its price, that's a good sign."
Viacom retains more than 80 percent of Blockbuster following the public offering. 
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Blockbuster
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