Press Release: June 28, 2000

WR Hambrecht + Co Initiates Coverage of Red Hat (RHAT) with a Buy Rating and a $40 Price Target

San Francisco, CA, June 28, 2000—WR Hambrecht + Co today initiated research coverage of Red Hat (RHAT) with a Buy rating and a $45 price target. WR Hambrecht + Co’s Open Source & Pervasive Computing analyst Keith Bachman cited Red Hat’s unique position in offering a ubiquitous computing platform and its expansion into other Open Source infrastructure areas, such as network management and embedded systems, as key reasons for the rating. WR Hambrecht + Co offers all its research reports free and real-time at www.wrhambrecht.com.

“Red Hat is the only Open Source organization that provides a common operating system for desktops, servers and embedded systems. The promise of a common operating system across various platforms offers significant benefits to customers and developers in terms of ease of use, management and support,” Bachman said.

Bachman projects Red Hat’s total net revenues will reach $84 million in 2001 and $154 million in 2002, up from $42 million in 2000.

Red Hat provides Open Source software including the Linux operating system for servers, clients and embedded systems.