RESEARCH TRIANGLE PARK, N.C. — October is shaping up to be a pretty dismal one for Red Hat shareholders.

Red Hat (Nasdaq: RHAT) shares dropped to a new 52-week low of $19.01 on Tuesday as fallout from an analyst’s report issued last week apparently made the stock radioactive in the minds of many holders.

Since analyst Katherine Egbert of Jefferies & Co. warned on Friday (the 13th, no less) wrote that Oracle appeared to be close to launching its own version of Linux, Linux pioneer Red Hat has been hammered.

Shares dropped to $19.90 from an opening on $21.49 on Friday and continued their slide on Monday, dipping to $19.84. On Tuesday, shareholders fled for safer ground again, sending the stock down another 4 percent to $19.01. RHAT closed at $19.02.

To say that 2006 has been tumultuous for the Hatters is to understate matters.

On May 8, Red Hat shares hit a 52-week high of $32.48. The surge in stock price came after Red Hat announced the acquisition of Atlanta-based JBoss, an open source software developer for servers. The move struck a positive chord at the time as Red Hat seemed to be broadening its product capabilities.

But the JBoss deal caused heartburn in a number of different quarters, apparently including in the executive suite at server giant Oracle. Ever since the JBoss deal, Oracle’s Larry Ellison has taken potshots at Red Hat, including in the pages of the prestigious Financial Times. Maybe Oracle, which has worked with Red Hat in the past, needed its own Linux version, Ellison said.

Red Hat chief Matthew Szulik responded in those same pages, writing that Red Hat really wasn’t challenging Oracle. And IBM, another Red Hat partner that relies heavily on server business, issued warm and fuzzy words about the JBoss deal.

But the Oracle-Linux rumors persist. Egbert’s report only exacerbated them,

“(O)ur independent checks in the past two weeks indicate that Oracle seems to be close to introducing its own software ‘stack.’,” she wrote. Egbert proceeded to cut her target price on Red Hat to $21 from $24.

Not everyone concurs that Oracle will go the Linux route. But Ellison could choose to partner with another Linux developer, wrote Tim Beyers for The Motley Fool.

“My problem isn’t with analyst Katherine Egbert’s sources, or her conclusion that Oracle is talking with the makers of Ubuntu Linux about working more closely together. My problem is that she believes the collaboration could result in an Oracle-branded Linux appliance. Frankly, I think that’s crazy,” Beyers said.

Not so, others say. On Slashdot.org, the website bible for all things Linux, a poster picked up on the Oracle theme on Tuesday:

“There have been rumors floating around of Oracle working on their own distribution of Linux. If this is true, it is widely believed that this enterprise edition of Linux would be in direct competition with Red Hat Enterprise Linux. What is spurring the rumors? Well, Oracle chief executive Larry Ellison said, ‘I’d like to have a complete stack. We’re missing an operating system. You could argue that it makes a lot of sense for us to look at distributing and supporting Linux.’ I know that Oracle has been doing a lot more than databases recently, will they go the extra mile and create their own stripped down Linux kernel? If they do, will companies switch to database solutions that are running Oracle only software for the benefits of support and (hopefully) stability?”

Meanwhile, some people continue to doubt the wisdom of the JBoss buy.

Peter Goldmacher, writing in the Wall Street Transcript’s “Enterprise Application Software” issue, blasted Red Hat.

“Open source is very interesting, because the poster child for open source has been Red Hat (RHAT), and it seems like Red Hat is losing their grip on their market because they have branched out into incremental functionality that they only needed some of their larger partners for. So if their larger partners feel like they want to get back into the business that they had previously allowed Red Hat to do for them, I think Red Hat could be in trouble.”

The Oracle rumors and recent sell-off have ruined a rebound for Red Hat. Shares dropped a whopping $6.11 on Sept. 27 after a third quarter earnings report that was regarded in many quarters as “weak”. The news sent RHAT to $20.12 as 62.7 million shares – 10 times the daily trade average — changed hands.

And just as the stock price begins to rally, the Oracle rumors surface once more.

Happy Halloween.