Red Hat, Inc. - Mamma said knock you out (Larry)

Last week was not a good week for Red Hat, Inc. (RHAT) and if you owned any shares of the company, you felt the pain. Red Hat's stock price dropped 24% last Thursday, which worked out to be a loss of roughly $680 million in market cap in a single bound. One announcement by a competitor caused this reaction on Wall Street, just one man, one announcement, and it wasn't Jim Cramer. It was Larry Ellison, or as us Stockmasters refer to him - The Beard Prince. Larry Ellison, CEO of the Oracle Corporation (ORCL) announced that his company will be offering identical support services for Red Hat products and charging customers 50% less then what they are currently paying. Red Hat countered last Friday informing the public they would be moving forward with a $325 million buy back, sending shares on a 10% increase since last week. The volume of RHAT shares trading these past few weeks has been off the charts and what got me was - Did anyone compare the value of Oracle's new services to what Red Hat currently offers before selling? Did RHAT and ORCL investors alike determine if the threat was credible and how much does Oracle really stand to gain? Does Oracle have the right stuff or is this just another threat by Larry Ellison to eliminate his competition at any cost?

LL Cool J is a fan of the red hat and in a time like this, his classic hit Momma Said Knock You Out says it all:
Don't call it a comeback
I been here for years
Rockin my peers and puttin suckas in fear

Larry is afraid of the competition, and he may have scored a knockdown early in the fight, but Red Hat is going to come back swinging, just you wait.

It felt like a mob mentality rather then speculation that caused the massive sell off on Thursday. Sure, the typical downgrades came in so the analysts look like their in-the-know, but did anyone consider the opinions of the software engineers and database administrators that would be responsible for implementing such a transition? You know those engineers, they’re the people that will be consulted at each company who currently uses Red Hat; those are the guys who have the most influential opinions on if the switch makes sense and is it worth it? Sure, you'll get the companies that override the Information Technology groups, but any reasonably run company doesn't switch essential IT services in the blink of an eye just because it sounds like a good idea. Maybe if you work at Fonzie Consulting and they call the Fonz in to bang on the servers to get them working again, and only he can do it with a quick comb of his hair, the pointing finger to the cute DBA, and wham! The server is up and running, and Oracle is now installed quicker than you can say 'Ayyyyyy'

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