Red-Letter Day: Red Hat IPO Is Priced Top-Range at $14

Plus, get ready to stock up on AOL shares, you widows and orphans.
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Net stocks steadied Wednesday morning as a widely awaited IPO came to market -- at the top of its expected pricing range, no less. And traders held their collective breath as an analyst came perilously close to calling America Online (AOL) a value play.

TheStreet.com Internet Sector

index was down 0.62 at 487.78 after pushing as high as 499.77 early on. The biggest news in a mixed market was the pricing of

Red Hat's

(RHAT:Nasdaq) IPO at $14.

AOL was up 1 11/16, or 2%, at 86 11/16 following some positive words from

Lehman Brothers

, but other Net bellwethers were mostly weaker.

Lehman analyst Brian Oakes put out a note on the Dulles, Va., online service provider titled, "Believe It or Not, It Looks Cheap!!!" He wrote that AOL's price/earnings-to-growth ratio "indicates that at these levels the company is trading at a 5%-40% discount to other high-tech growth companies. While tough to call it a 'value stock,' we believe it counters the perception that its valuation is extreme." Lehman has done underwriting for AOL.

Also among the big names,

Yahoo!

(YHOO)

was down 1 1/2, or 1%, at 126.

Amazon.com

(AMZN) - Get Report

was off 2, or 2%, at 89 and

CMGI

(CMGI)

was down 2 11/16, or 3.5%, at 73 1/2.

CNet

(CNET) - Get Report

was off 2 3/4, or 8%, at 31 3/4.

Bloomberg

was reporting that Paul Allen's

Vulcan Ventures

had filed with the

SEC

to sell 400,000 shares.

The IPO market has been weak of late and two companies expected to go public --

OpenSite Technologies

, which makes software that creates online auction sites, and

garden.com

, which operates three gardening content and e-commerce Web sites -- were postponed. But Red Hat's heavily anticipated IPO was priced top-range at $14, a day after the distributor of Linux software went against the recent trend by raising its price range to $12-$14 from $10-$12.

InterWorld

(INTW:Nasdaq), an Internet commerce software company, was expected to go on Tuesday, but now is scheduled to begin trading today. It was priced at $15. Also,

Mortgage.com

(MDCM:Nasdaq) was priced at $8.