Stock Watch: Red Hat Soars On New Alliance With Dell

Shares of Red Hat (Nasdaq: RHAT), which sells packaged versions of the Linux operating system, thundered ahead 31-1/8 to 232-1/8 on Monday. The gain of 15.5 percent came after Red Hat announced that it has extended its strategic alliance with Dell Computer Corp.

Dell has committed to install Red Hat Linux on all of its current and future PowerEdge servers. In addition, Red Hat and Dell have forged a worldwide service and support agreement that will give Dell customers discounts on services and support.

It is going to be interesting to watch how Red Hat stock behaves the rest of the week, because a sizzling initial public offering from another Linux-related company looms. VA Linux Systems, which develops servers and workstations designed for Linux, is expected to make a lot of noise when it goes public this week.