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Technology Stocks : All About Sun Microsystems
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To: techtonicbull who wrote (39431)12/18/2000 3:44:45 PM
From: QwikSand  Read Replies (1) of 64865
 
Oops.
--QS

Someone Is Drowning in a Sea of Sun Product
By James J. Cramer

12/18/00 7:21 AM ET

Is there a sea of Sun Micro (SUNW:Nasdaq - news - boards) computers somewhere? Everyone denies it. Everyone says demand is as great as ever. The analysts, the companies, the dot-coms, the hosting companies, the infrastructure folks -- they all assure us that there is no glut of servers. And I think someone isn't being as forthcoming as he should be about the oversupply.

There have been too many dot-coms that have gone belly up with perfectly good hardware that can be used by others for me to believe that the end demand can be anything like it was 10 months ago, when you had to beg Sun Micro to get in the queue for product. I don't think anyone is begging for Sun product these days.

In fact, I think that the real backup must be with the liquidators, the companies that deal with the excesses. Much of the equipment that companies bought became part of sale leaseback transactions with a couple of West Coast banks. You borrowed from them and they took title to the giant servers. It was a terrific way to free up cash and everybody I know in the dot-com world took advantage of it.

Now I know many people who have excess servers and I know many belly-up dot-coms that did these sale leasebacks. The banks themselves claim they know nothing about the sea of Suns that I know has to be out there, but just like everything else about this dot-com collapse, it is in NO ONE's interest -- save me, because I can't help myself -- to talk about the coming glut. It is what makes Sun Micro a no-own for me, even down at these levels.
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