Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: uu who wrote (5826)	11/27/1997 5:42:00 PM
From: KC	Read Replies (1) \| Respond to of 64865

I agree Addi...If there were a huge "Java premium" built into the shares perhaps there would be cause for concern...but there isn't...in fact the market is not trading on fundementals but pure fear..Remember DRAM, SRAM, HDD, PCBs..are all getting cheaper by the minute...This is a major positive for SUNW..The market is trading Sun as if it were a DEC or a SGI...Sun is a leading edge supplier of an array of products that are INCREASING market share....but thats what makes a market and what will lead analysts to say " the easy money has been made on Sunw" when we again trade at 20x next years earnings or around 50 $ It may take a quarter or two ...maybe not...but it WILL happen...Anyway I am trying to find any info on Sunw's operations in Asia...I have a lead or two from MDs in Asia and will try to pass on anything I may find out ...here is something from an interview from a recent Bangkok Post interview with Scott McNealy.... Sun outlines its commitment to Asean McNealy says firm is here for long haul despite turmoil Borisuthiboun Dasaneyavaja The economic situation in Asean has been heading downwards - and with it, investment in IT. In addition, devaluation of Asean currencies translates into less money being contributed by subsidiaries to their parents companies abroad. Database talks to Sun Microsystems President and Chief Executive Officer Scott McNealy on Sun's view of the sitution and its commitment to the region. Database: What is Sun's policy in this part of the world, which is facing an economic slump? Are you still committed to being a player in this region? Scott McNealy: Sun is absolutely committed to be not just a player but a very significant partner in the IT development of Southeast Asia. Our presence here is for the long haul, and has always been. The current economic situation in Southeast Asia is actually not an "economic slump" but a slowdown. All countries in Asean are still forecasting positive growth for 1997 and 1998, although the growth projections are now lower. For example, one source indicated that Thailand will still experience a 3% GDP growth for 1998. Database: How does Sun plan to help their distributors and customers in this region? Mr McNealy: We are already actively helping our partners in this region in view of the current uncertain financial fluctuations. One of the most significant things we are doing is to help our partners better manage their inventory. This reduces their interest rate burden, therefore reducing their costs to customers. Another way is helping them to co-fund currency hedging costs, again reducing their cost of doing business. Database: Do you feel that Asean is losing its charm for international IT suppliers because of this situation? Mr McNealy: No, Asean is certainly not losing its "charm" for major IT suppliers. Sun Microsystems believes that Asean countries will still enjoy one of the fastest GDP growth rates in the world, in the mid to longer term. IT is crucial in ensuring that these economies continue to stay ahead, and as such, we believe that Sun is well poised to further contribute towards this growth. Database: Up until now, has Sun's sales revenue in this region been higher or lower than the same period last year? By how many percent? Mr McNealy: By company policy, we are not permitted to share sales revenue in this region. Suffice to say that our revenue growth in Asia South (which includes Asean and India) till June 1997 grew at a robust rate of 40%, almost double the growth-rate of the company as a whole. This is further evidence of the attractiveness of this region. Database: From your point of view, why did Asean crash? When do you expect recovery? Mr McNealy: Many theories have been discussed on this so-called "crash". Our view is that escalating annual current account deficits experienced in some countries here were one of the main sources of the current uncertainties we are now facing. However, the fall in currency strength in these countries will now mean a very positive investment prospect for them, especially in manufacturing. Investments will flow into these countries, therefore reversing the slide in economic growth in the mid-term for these countries.

To: uu who wrote (5826)	11/27/1997 8:25:00 PM
From: Alok Sinha	Read Replies (2) \| Respond to of 64865

I have followed your comments on the SUNW thread for sometime now and have usually found them knowledgeable. As SUNW is app. 40% of my investment portfolio, I do find you optimism encouraging. I agree that financial firms will benefit from consolidation and liberalization of SE Asian economies. In the short run some firms such as Citi may see accelerated charge-offs from their exposure which may result in a buying opportunitiy in other US based financial firms. Being an employee, I like BofA at these levels. The main risk will come from trading operations of these firms where the potential for large losses (like the one in Chase) exist. On SUNW, do you think McNealy's single minded obssession with MSFT (which the analysts love) affects the stock performance adversely. Objectively speaking, the stock just does not have the respect on wall street (like INTC, CSCO, MSFT, IBM, or even ORCL). Certainly has superior technology to some of theses Sell offs may be irrational as you have contended, but some firms are affected les and bounce back faster. What do you think afflicts SUNW as a stock ? Alok P,.S I also own ASND, COMS, CSCO, BAY, IFMX and SYBS

To: uu who wrote (5826)	11/27/1997 11:00:00 PM
From: Jeff Hayden	Respond to of 64865

Addi, >>>...I believe Citicorp (and soon other big US financial institutions) will become the major financial firms of the South East Asia. US financial firms (and I think soon US technology firms) will assimilate the local firms in countries such as Japan, Korea, etc. Mainly because these coutnries have no other choice but to let powerful rich US corporation to bail them out if they want to continue to survive! <<< Very astute observation! In retrospect, doesn't this asian situation seem a little like the US back in the '80's when so many companies sold out to foreign investors? I guess we didn't turn out as bad as I thought we would. A little disruption goes a long way for recovery. After your opinion, I'm going to look at this problem differently. Jeff

To: uu who wrote (5826)	11/28/1997 3:26:00 AM
From: Holger Johannsen	Read Replies (3) \| Respond to of 64865

Addi, thanks for your lengthy answer. I do share your optimism about the situation in Asia and feel that most of it was overblown by the media. Nevertheless I have two remarks about your comments: Their immediate need is to shift from a mainframe computing model to a client-server architecture. IBM and Sun (and to some extend HP) are in an excellent position (and perhaps the only companies that can) take advantage of this situation. I'm long on Sun and I do admire their technological leadership and vision but I still feel that both, Wintel and Sun, will be able to coexist. I'm long on Compaq as well and I don't see any argument why Sun and IBM should be the only companies that can take advantage of the current situation in Asia. What is the distinct advantage of those two companies? A few days ago Citicorp bought the 4th largest bank in Tailand..... This argument has been made by James Cramer on CNBC as well. He feels that Citicorp will benefit from the current situation and will be the leading bank in Asia in the coming years. I'm not so sure about this. Remember the S&L crisis in the US? Did foreign banks invade the US and do they now dominate the US market today? No. But this was the time when you could have bought CCI for 10 bucks. Now you have a crisis in Asia and I think it is time to pick up some of the local banks instead. Bank of Tokyo-Mitsubishi, Thai Farmers Bank and especially State Bank of India do look very cheap. All three are the leading banks in their country and trade at an all time p/e low. There is certainly more risk attached to them than to CCI but I think it's worth it. BTW, the most agressive approach in the banking industry is probably done by GE Capital. They are already one of the largest banks in Europe. Holger

To: uu who wrote (5826)	11/29/1997 10:39:00 AM
From: High-Tech East	Read Replies (3) \| Respond to of 64865

Addi, I hope you and family had a great Thanksgiving. We have a small amount of snow and ice on the ground here (suburban Boston). Thanksgiving morning it was 30 degrees with winds gusting to 55 mph. Brrrrrr! It made for an interesting Thanksgiving morning with the hundreds of traditional high school football games that kick-off at 10:00 AM EST. In the last week, MSFT has settled, I believe, two lawsuits. One with the European Union, which involved only one company (I think) and one with a company in the Seattle area (again, I think). 1. It seems that MSFT has kept a low profile over the last week or two regarding both the DOJ and SUNW lawsuits. 2. MSFT's 'day-in-court' with the DOJ starts this Friday, December 5. 3. I would bet that there are huge "goings-on" behind-the-scene within and between MSFT, the DOJ and possibly even SUNW. I may be wrong in my analysis, but it seems that the 'general concensus' in the business and technical press is that MSFT is clearly in the wrong in both cases. Not that the press decides legal cases, but IF Bill Gates and MSFT management see it the same way (despite what they say in public), then I would not be surprised to see a negotiated settlement announced prior to Friday in one or even both cases. What do you think, Addi? What do others on this thread think? What do you think, Twister. Regards to all. high-tech east. Ken Wilson