The company, which floated on the Nasdaq exchange in 1999, has decided to follow several other high-profile technology companies by taking its share listing to the main US stock exchange. Shares are due to begin trading on December 12th.
The decision to list its shares on the larger exchange is intended to increase the company's exposure to large institutional investors and improve its options if it tries to raise additional capital in the future.
"The move to the New York Stock Exchange is a significant event for Red Hat. We believe that listing on the New York Stock Exchange will increase Red Hat's visibility among investors, reduce trading volatility and offer more efficient pricing," said Charlie Peters, chief financial officer at Red Hat.
Today, Red Hat is valued at just over $3bn, on a par with rival Novell, which owns the SUSE Linux distribution.
Analyst group IDC predicts that the global market for Linux will be worth $35bn by 2008.
"Linux is no longer a niche phenomenon. The overall Linux marketplace revenues for server and PC hardware and packaged software on Linux are expected to reach $35.7 billion by 2008. Packaged software is the fastest growing market segment within the Linux marketplace in terms of revenue, growing 44 per cent annually to over $14 billion in 2008," said Vernon Turner, group vice president and general manager of IDC's Enterprise Computing research division.
Demand for Linux is also being fuelled by emerging markets such as China which has become a key market for both Red Hat and Novell.
IDC forecasts China's Linux market will grow at 34 per cent a year from 2006 to 2010.
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