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Technology Stocks : All About Sun Microsystems
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To: Mark O. Halverson who wrote (62960)4/30/2005 6:08:35 PM
From: QwikSand  Read Replies (1) of 64865
 
My thought is that it's so difficult to evaluate fundamental trends for the business right now that the usual accounting ratios don't provide much guidance. The most important thing you said was that they have to deliver for good things to happen. They haven't delivered revenue growth or profits in years, nor have they provided any convincing news to indicate that things will turn around.

Therefore the odds of Sun delivering seem long.

McNealy views himself as a winner who always eventually comes out on top; he's fabulously rich, so there will be zero real consequences for him no matter what happens to Sun (since he is honest, not a Ken Lay-style gangster CEO in any sense); he owns the BOD lock stock and barrel; and he's no doubt sick of all the carping leprechauns.

As the L.A. Times said in an article today (may need registration), it's unlikely another company would acquire Sun:

Sun's rivals, mainly IBM Corp. and Hewlett-Packard Co., theoretically could be interested in buying Sun to reach its clients, Gillett said. On the other hand, he added, "it would seem easier to try to steal the customers."

latimes.com

That's why the LBO sounds reasonable. I can easily imagine McNealy believing that he's the only one who can turn things around, and that he can do it easier without the financial community breathing down his neck.

BWDIK.

--QS
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