Yeah, we've been saying the SUNW etc. (the server/workstation part of the hardware sector) is in trouble. Demand just isn't bouncing back yet, and they're probably looking at another bad quarter or two. HWP is not getting beat-up too badly today though, as a lot of the bad news is already priced in.
Wouldn't want to be long that thing, though. The media did a good job of mesmerizing everyone with Carly, and she is probably the perfect person for the job. But the fact remains, they have a whale of a job on their hands to turn that company/culture around into a lean, mean fighting machine (a.k.a. a "SUNW light"). They will basically tell you that if you listen closely (e.g., latest Business Week articles). But it's such a great company/tech institution, I'm sure they'll eventually get there!
This is a pattern in many of the great technology companies... e.g. Compaq, Apple, Dell, Msft, etc... huge long-term up/down cycles. A few never come back... e.g. DEC, XRX. A friend of mine retired from IBM in 1990, took his retirement $ and has done very well playing these things... he has one trade, calls it the "tech wreck" trade... buys in 10-50,000 share blocks when they're really hammered and holds 2-5 years. He's made a fortune - 10x what he made his entire 40-year working career! God bless America...
-Steve |
