Investment firm looks for Sun's true value

The US private investment firm which has bought $2.1bn of Sun shares since May says the companies are in talks to have Sun's true economic value realised. Southeastern Asset Management has built up a 21.6 per cent stake in Sun. The talks may mean a sell-off of Sun assets, a leadership change or even a sale of the company. Sun …

[Anonymous Coward]

Going private...

My guess: it's less about SAM forcing a leadership change or sell-off...and more about getting away from the fickle speculation driven market and going back into private ownership. I wouldn't be surprised if SAM, Sun + one or more other parties buy the stock back.

[Ian Michael Gumby]

The irony...

Sun is always a bit late to the party.

Sure they have given us great technology back in the 90's when DEC owned the campuses.

They also gave us Java (Just didn't capitalize on it as a way to make revenue)

Now they spend 1billion for MySQL? (Rather their latest forray after supporting JavaDB/Cloudscape/Derby)

Hey! Back in 2000/2001 they could have bought Informix Software (The database division of the "reversed" merger Ascential aka 'Ass-n-tail') for a Billion or so dollars.

Instead IBM bought them and of course life has been miserable as the bastard step son to Janet Perna's DB2. (Now that Janet has left the building, Informix is getting some more attention).

But I digress.

Informix had about $100 million in revenues when they were bought. How much revenues did MySQL have? And has Sun been able to convert those sites which run MySQL in production yet fail to pay for the product?

Sun Microsystems would have been better off purchasing a company that supported an advanced version of Postgress which would have been more competitive with IBM and Oracle.

There they could have further aligned the engine with their advances in core cpu improvements.

Then they would have JavaDB as a lightweight engine, and SPDB as their core engine.

(SPDB = Sun/Postgress DataBase).

This would have allowed them to develop a services/consulting arm and database technology that could compete on the OLTP and distributed DW front.

Now the best engine is IBM's IDS (Informix Dynamic Server). Its the greenest engine (efficient) and probably the best suited to take advantage of the Rock generation of CPUs.

And you heard it hear first.

The pirate... Its not to late to have Sun change course and take charge.

[Anonymous Coward]

loss for third quarter

That would be for the *first* quarter, Sun follows the US financial year which starts on July 1st.

[Anonymous Coward]

Asset Strippers

So it's good bye Sun.

The usual outcome of actions like this is that

1 the 'Investment Company' flogs everything of value,

2 focusses on building big short term profits at the expense of the long term,

3 pays itself a huge dividend or two out of the proceeds,

4 buggers up employee morale, causing the best ones to leave

5 sells out at a huge profit, leaving a worthless and unstable shell floating on sales/turn over.

Net result is an apparantly profitable company that's rotten to the core, without the resources to weather even a mild storm, let alone the mess that's facing us now.

It's time these leeches were outlawed so that companies could build up good reserves to weather economic and trading problems.

[Che Kristo]

Hopefully going private

IMHO Sun is massively undervalued by the market. Yes Sun is more susceptible to the Financial Market Crisis than any other company outside that sector but even so it is still turning profits - for those with short memories turning a profit was a rare event for Sun once upon a time. Sun is reinventing itself and expanding into new markets a process that scares investors (See IBM) but in the end can pay off big time with those willing to hang their balls on the block.

[Matt Bryant]

US private investment firm?

I thought it was a Taiwanese asset-stripper compa- sorry, investmnet firm - that was getting ready for the fire sale?

[retiarius]

Upside-down privatization

In the old days of raiders, greenmailers, LBOs and MBOs, a stalker

would accrete shares at a low price (the "toehold" strategy), then pounce,

sending the shares to a higher spike at the take-private price, rapidly

followed by massive layoffs, restructuring, and a re-spun IPO.

This one is backwards, with a significant shareholder first acquiring

20% at a *higher* price, then filing the 13(d) amendment to

rescind "beneficial" ownership. Seems lame.

Agree that break-up value (cash, Java, Solaris, ZFS storage, legacy

SPARC support, and some nice IP in areas like proximity computing)

makes ye olde SUNW worth more dead than alive.

[Matt Bryant]

Sun's too good for that.

I can't imagine why anyone would want to break up Sun. They're technology and leadership are second to none.

[David Halko]

SUN is way too undervalued

SUN has great technology, the only issue is profitability.

StorageTek was a good move, to keep SUN in the DataCenter, for a future come-back. SPARC & Solaris 10 should be placed in those StorageTek units, to help increase the overall SPARC volume, to help decrease cost to the rest of the customer base.

SUN should buy NetApp, put SPARC & Solaris 10 in those patforms, and continue the trend with other appliance companies... once again, to increase SPARC volume and lower cost to the consumer.

Appliances worked for Apple...

[Nick Kew]

IBM precedent

Sun has historically relied too much on banking clients, who are currently spending rather less than of old.

Some of the newer areas of business are generating healthy profits. Perhaps not unlike where IBM was a few years back.

At today's prices ... gotta add Sun stock to the pension fund between now and end-of-year.