Despite the jaded state of the internet stock boom, the new millionaires and billionaires just keep on coming. Red Hat, one of the many companies promoting the free Linux operating system, is the latest stock market sensation. Its stock, which came to the market last month at $14, has since rocketed to more than $120, creating three new paper billionaires.
Frank Batten Jr, the largest investor, has stock worth close to $1.8 billion, while Marc Ewing, the 30 year old founder, and Robert Young, the chief executive, have both squeaked past the $1 billion mark.
The irony is that the Linux system is free, created by a 'community' of programmers working in their spare time. Red Hat makes money by packaging the product and telling people how to use it.
In an effort to keep the programmers who built Linux on its side, Red Hat offered over 500,000 of them a chance to buy shares at the public offering. But when E-Trade, the broker handling the offering, applied the usual checks to make sure it sold risky shares only to experienced investors, it decided that the geeks and hackers who created Linux were not qualified to buy shares. Red Hat stepped in to sort out the ensuing PR debacle and now says that most programmers who wanted shares got them.
A minority are still complaining, but the bonanza is not yet over. A host of other Linux companies are lining up to follow Red Hat to the market.
The other millionaire of the month is Carl Russo, chief executive of Cerent Systems. Little more than a year after joining the company, he helped secure a record-breaking offer for a technology start-up by agreeing to a $7 billion bid from networking giant Cisco Systems.
Now $350 million richer, he says he looks forward to joining the Cisco team and does not mind that he will no longer be in charge of his own show. Being a good follower requires much the same skills as being a good leader, he says. It's the right sort of sentiment for the 1990s. But its hard to imagine many of the great leaders of history nodding in agreement.
Talking of leaders becoming followers, Rick Belluzzo, the former wonder boy of Hewlett-Packard and, until recently, chief executive of computer company Silicon Graphics, has decided to move to Microsoft where he will take over the internet division - a job that Microsoft, has been trying hard to fill for months. The timing of Belluzzo's move is unfortunate, coming just weeks after he announced plans to lay off close to 10% of the workforce and to overhaul the business. The folks at SGI are still in a state of shock. Belluzzo would be well advised to skip the leaving party.