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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Charles Tutt who wrote (42254)	3/21/2001 10:08:43 PM
From: uu	Read Replies (1) \| Respond to of 64865

Dear Charles, > I don't have to read past your first sentence to know you have no clue about Sun's business model. It was NOT "fueled by the .com phenomenon." That whole sector was a small part of their business at its peak. With all due respect I think you may misunderstand the notion of the .com business model. It was not just the Yahoo's, pet.com, etoys.com, etc. etc., but the impact they had on a number of industries, including the telecommunication industry which convinced them to see the need to aggressively build its networking and server centric computing model infrastructures. Sun may tell you that .com was only 10% of their business. Directly and in terms of companies such as etoys.com, yes that may very well be true, but that tiny small etoys.com and its peers that were growing in numbers by seconds during 1999 and 2000 caused companies ranging from Exodus, Worldcom, Sprint, AT&T, AOL, etc. to Cisco, Intel, etc. shift their plans to meet the demand capacity of the .com business model. When the .com business model (whether it was based on B2C or even B2B) failed (or at least proven not to generate as much revenue or profit as the business plan paper work indicated), the telecommunication model of feeding on the .com growth died as well. As someone who founded and started a .com business and went through all the stages from its funding model to building the infrastructure I came to know very early in the game that the model is superficial and was about to collapse. I Even predicted the exact date of the collapse in October of 1999, and told all my close friends and family members to sell everything beginning March of 2001. I promised myself I would do so too! But of course for many personal reasons I did not and am paying so dearly now for that decision. Anyway.. but that is a different story... As for your notion of being able to buy one E10000 at half price, or whatever... In the final analysis the fundamental economic concept of supply and demand will drive the price. And I have a strong feeling you may soon get your wish (at this time and during the next 5-6 months) - and not neccessarily from the 3rd parties but directly from Sun! In any event, Sun's business model remains to be one that relies on the server centric computing model. This model will continue to grow as it is the center of the new economic realities. However those who are going to deploy this model must figure out first how to profit from it. The notion of 1997-1999 to just deploy the model and worry about making profits later will no longer work with the investment community. In 1997 Sun had a market cap of about 7-10 billion with a P/E of about 15. It has come a long way since then with a market cap of about $58 billion even now after setting new 52 week lows and still holding a P/E of about 30. However in my view I do not believe it deserves to have a P/E of anymore than 20-25 when its growth for the next 2 years (IMHO of course) will be in the 15%-30% range. IBM in my view is ridiculously cheap compare to SUNW... Anyway, of course I need to remind you that I have proven to be wrong many many many times in the past, and I will not be suprised to be wrong again this time too. Regards, - Addi