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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.

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. 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,



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

(AMZN) - Get Free Report

was off 2, or 2%, at 89 and



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


(CNET) - Get Free Report

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


was reporting that Paul Allen's

Vulcan Ventures

had filed with the


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

, 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.


(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,

(MDCM:Nasdaq) was priced at $8.