The initial public offering of VA Linux Systems (Nasdaq: LNUX), which develops servers and workstations that are designed for Linux, racked up the best first-day performance in history Thursday, gaining a stunning 697.5 percent.
The initial public offering was priced at $30, the top of its revised range of $28 to $30, after an original range of just $11 to $13. The stock gained 209-1/4 to close at 239-1/4 on Thursday after opening at 299 and trading as high as 320. The performance supplants TheGlobe.com’s 606 percent climb (November 13, 1998) as the highest first-day percentage gain in history.
Clearly, the fervor surrounding the Linux operating system is growing. VA Linux’s performance also reinforces the fact that the current IPO market is like nothing we have ever seen. According to Hoover’s Online, nine of the top 10 first-day performances have occurred in the last year — and four of those have happened in a little more than a month.
Unlike TheGlobe.com, VA Linux’s stock will probably not fall back near its offering price. The company has an impressive list of customers including IBM, Cisco Systems, eToys and Inktomi — and Intel is a major shareholder.