Scott McNealy's words, re the buyout, fell short of a blanket denial. He called the rumor "unsubstantiated," and castigated Business Week, but didn't (for example) specifically deny talking to Silver Lake Partners. So possibly conversations occurred that someone blew out of proportion. Who knows? In any case, it is noteworthy that the rumor rang true.
Here's why I'm intrigued with SUNW. The immense cash hoard, of course; a splendid safety net. Also SUNW is highly leveraged, as follows: Its Price/Sales is only about 1 versus, say, 5 or 10. When and if the company finds its way, goes solidly into the black, this leverage will cause the share price to climb precipitously. In summary, we have low downside risk and high upside potential. Of course, SUNW does have to deliver for good things to happen. I think the odds are that within a year or two it will, with or without McNealy(probably faster without him). Any thoughts?
Best,
Mark |
