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Technology Stocks : All About Sun Microsystems

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To: QwikSand who wrote (64771)3/24/2009 2:08:05 AM
From: QwikSand  Read Replies (1) of 64865
Guess it was too good to be true of course. I suspect many of Sun's most pampered engineers would rather go down with the ship than work for IBM, and may well exhibit that preference brazenly during the due-diligence process. They've gone 27 years in their bubble.

From current WSJ article.


...There are several reasons why investors might be skeptical. For one, the companies remain mum days after reports of a both a possible deal and a lengthy due-diligence process. Also, few others look prepared to compete with IBM for control of the company, which makes the chances slim for a bidding war and a higher premium.

Additionally, IBM may find it faces significant challenges integrating a company with many disparate businesses, and a culture said to be led by engineers, not executives.

To be sure, IBM has the cash to make a deal happen despite the tight financing environment. As of Dec. 31, IBM had $12.9 billion in cash and cash equivalents, and reported a 12% rise in fourth-quarter profit, bucking the trend of other tech bellwethers suffering from slumping spending.

But as early excitement winds down, so too could Sun's share price. The company has been hit by a drop in demand for its high-end servers. Sun has traditionally relied on purchases from the struggling financial-services sector, which was hit early in the current downturn.
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