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Red Hat accounts go into the black Red Hat, the software company which surprised investors with its rapid rise during the dotcom boom, yesterday did something more unusual: it announced a profit. By Guardian Newspapers, 12/19/2002 Red Hat, the software company which surprised investors with its rapid rise during the dotcom boom, yesterday did something more unusual: it announced a profit. The company, which makes desktop and business software, reported a $300,000 (£200,000) pre-tax profit for the third quarter, the company's first positive result since it floated in August 1999, near the peak of the internet bubble. The profit came on revenues of $24m for the quarter, which were reported using GAAP (generally accepted accounting principles), and represents a sharp turnaround from Red Hat's $15m loss during the same period in 2001. When it floated in 1999, Red Hat made headlines for its rapid share rise. Its initial public offering on Nasdaq was priced at $14 a share and rose to $52 in the first day of trading, an increase of 272%. Shares in the company later reached $80. After the dotcom bubble burst, Red Hat's share price fell as low as $3.46. At the time of flotation, the North Carolina company was one of a number touted as potential rivals to Microsoft, because of its association with the Linux computer operating system. Linux software is available free under an "open source" licence. Rather than charge for the programs, Red Hat earns revenue as distributor and service provider. The company's turnaround has been helped by the popularity of its server products - software that runs computer networks.