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Technology Stocks : All About Sun Microsystems
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To: uu who wrote (8138)3/9/1998 5:18:00 PM
From: Alok Sinha  Read Replies (1) of 64865
 
Addi,
As much as I hate to admit it, I am reluctantly (and slowly) coming around to your view that some of these sell-offs that occur frequently in the market place are "idiotic" in nature, and represent buying opportunities . For most part, I remain a believer in the market's efficiency and its ability to price securities accurately given the information available. However, there has to be some explanation for the 20% drop in SUNW's price over the last week, in the absence of material new information. There certainly has been an increase in the risk that SUNW may miss its earnings based on announcements from other leaders, but I can't see how that increased risk makes SUNW's value only 75% to its value last week. The only other reasonable explanations are (i) SUNW has exceptionally high exposure to SE Asia - Not true
(ii) SUNW's mgt is incompetent to carry the company successfully thru these short term issues - Not true (IMO)
(iii) Slowdown in PC market and Asia together represent a permanent impairment to SUNW's long term business model - Not likely
(iV) NT somehow has become a greater threat - Probably not
(v) Some of these sell-offs are idiotic, and as such cannot be explained logically . Your view

Regards

Alok

PS - I doubt there will be a warning forthcoming for Sun given the back end loaded nature of this qtr. They won't know till the last week how the qtr will materialize. It probably is in their interest to warn, gets estimates reduced and then come out with a positive surprise. The HR person I spoke with today did emphasize to me that the analyst who downgraded on Fri did not reduce earnings est.
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