SUN microsystems: 7/18/96 quarterly report - BIG! Message Board

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Technology Stocks : SUN microsystems: 7/18/96 quarterly report - BIG!

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To: cfimx who wrote (332)	9/18/1996 10:36:00 AM
From: Joe Rizzo	of 386

Twister, I agree that Andy would not want to trade places at this time. The question is which is a better investment now: A single product company with $100 billion in market value or a greatly diversified technology company with leading edge products in many fast growing markets valued at $11.5 billion. I think Intel is a great company, but Sun will be a $23 billion company before Intel is a $200 billion one. To say Scott's ego has gotten in the way of running a sound business is patentedly absurd. Scott has been one the most rational, conservative, forward thinking managers of all time. He still has never had to resort to the bogus, big bath write off of almost every other company, even Intel. Somebody wants Sun's products--Bookings were up 35% last quarter; And I am hearing that bookings this quarter are very strong. By the way these bookings are 10 to 15% higher than intel, so mathematically Sun is taking market share for the last two quarters. You can say that my estimate of Java's value is "nothing but a random number," but people are lining up to license the technology. You do not have to believe my estimate, but I assure you Java's value is at least $2 billion in an IPO. My point about Intel's capital expenditures is simply an observation about accounting--I am simply a financial analyst. But Intel's Capital expenditures in 96 will be $3.6 billion, while depreciation will be $1.9 billion. Basic financial analysis says that if these capital expenditures are required to sustain the business--a reasonable argument in Intel's case--pre-tax earnings are overstated by $1.7 billion or almost $2 per share. Just some food for thought. Joe Rizzo JMR Trading P.S. Even though I think you are wrong,I appreciate the provocative thoughts you have offered.

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