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   Technology StocksAll About Sun Microsystems

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To: Mark O. Halverson who wrote (64793)4/6/2009 11:16:55 AM
From: alydar
1 Recommendation   of 64865
What is happening is that the Ponytailed CEO is wonderful at blogging and articulating his zen thoughts, but, when it comes down to actually building a profitable business or trying to sell a dying one, he is know wheres to be found. The Ponytail does not have a backup plan so I cannot see how JAVA was the one who imposed the restrictions on the deal. JAVA is cooked. As usual, the ones that get hurt from poor management are the employees, customers and shareholders. I doubt if this is positioning ploy by either company.

Maybe Oracle will pick up the company for a 2-3 billion and get a decent operating system to give away instead of a rebranded Redhat product.

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From: Arthur Tang4/6/2009 11:27:07 AM
   of 64865
So far, just a regular day daytrading.

Typical volume for a few pennies each trade for a few hundred dollars profit.

But in a day for 36 trades, can make a nice living.

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To: alydar who wrote (64794)4/6/2009 2:14:53 PM
From: Mark O. Halverson
   of 64865
According to (see below)Schwartz was in favor of the acquisition, McNealy was opposed. I agree, it is most unlikely the talks breakoff was posturing or tactics. Nonetheless, IBM deal still a possibility, I think. We'll see. Best, Mark

Market Movers by Will Swarts (Author Archive)
3 Stock Picks: JAVA, MGM, DNDN

Merger Move Hurts Sun Shares
Investors sold Sun Microsystems (JAVA: 6.54*, -1.95, -22.96%) after weekend boardroom moves endangered a $7 billion merger with IBM (IBM: 100.65*, -1.57, -1.53%).

Sun’s board of directors rejected IBM’s formal offer on Saturday, which prompted IBM to withdraw its bid the next day, according to The Wall Street Journal. Sun shares plunged Monday on news of the deal falling through and problems between Chairman and Co-founder Scott McNealy, who opposes the buyout, and CEO Jonathan Schwartz, who favors the merger. The company declined to comment on the reports.

Analysts applauded the deal when it was unveiled March 17, though some saw it as an attempt by IBM to block competitors, rather than being fully ready to integrate Sun into the business.

Meanwhile, IBM appears to be in for a tough 2009, regardless if the deal goes through or not. Canaccord Adams analyst Peter Misek said IBM’s business computing services division could be in for a weak quarter. The group, which emphasizes services and software, rather than capital expenditures for new equipment, has been a critical part of the company’s steady showing even in the midst of recessionary cutbacks. Misek on Monday cut his rating on IBM from Buy to Hold. He kept his 12-month target price at $110 a share.

“The share price has performed well during a volatile bear market,” he wrote. “And while we continue to believe IBM is one of the more defensive names within the technology sector, the risk-reward level is more balanced with less than 8% return to our target price.”

Bottom Line: Hold
Betting on mergers is always risky.

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To: Mark O. Halverson who wrote (64796)4/6/2009 5:41:19 PM
From: Charles Tutt
   of 64865
I can't help recalling that a few years back, Apple was on the skids and Sun tried to buy it. That deal fell through. Apple shareholders did pretty well.

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To: Charles Tutt who wrote (64797)4/6/2009 5:58:38 PM
From: Jatin Kadakia
   of 64865
I can't help recalling that a few years back, Apple was on the skids and Sun tried to buy it. That deal fell through. Apple shareholders did pretty well.

It was probably in the best interests of industry, apple shareholders and this country that the deal fell through. McNealy and ponytail would have destroyed the apple brand along with "Sun". What an arrogant bunch at Sun determined to run it in to ground.

I hope there is white knight lurking in the background. If not and if IBM walks away completely, next 12 months would mark an end of Sun era.


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To: Charles Tutt who wrote (64797)4/6/2009 9:20:56 PM
From: Mark O. Halverson
   of 64865
I felt pretty good about Sun, that it was making progress, prior to the WSJ buyout announcement. If talks with IBM (or some other company, possibly) don't resume, my chief concern is the damage to Sun's customer relations caused by the takeover talks. Johathan will have his work cut out smoothing things over with Sun's customer base. On "water under the bridge" topic, I sigh when I recall the 3 billion that Sun squandered on Storage Technology. It would be most useful right now. Best, Mark.

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To: Mark O. Halverson who wrote (64799)4/6/2009 9:56:57 PM
From: Sr K
   of 64865
Isn't the STK part what attracted IBM?

For a long time I haven't liked these WSJ early reports on mergers. Companies and boards should keep their mouths shut. Where are they getting these sources? Why doesn't the SEC investigate? Why doesn't the NYTimes investigate?

What happened to using code words and not telling anyone until the boards had approved it?

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To: Sr K who wrote (64800)4/6/2009 10:35:52 PM
From: Mark O. Halverson
   of 64865
It is my recollection that Sun, for the most part, acquired tape storage technology from STK(as opposed to disk or other media). The acquisition per se was okay, but the price seemed very excessive, even at the time. Re the WSJ leaking the talks, was the source someone at Sun or someone at IBM ... I have no idea. If Sun leaked, presumably to spark competing bids, it blew up in Sun's face. Very stupid! If IBM leaked, it was worse, as the leakage damaged another company (Sun). Maybe we'll learn at some point.

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To: Charles Tutt who wrote (64797)4/7/2009 4:11:52 PM
From: Mark O. Halverson
   of 64865
Sun Board to Meet Tomorrow as Talks With IBM Dissolve
By Connie Guglielmo and Katie Hoffmann

April 7 (Bloomberg) -- Sun Microsystems Inc.’s board plans to meet tomorrow to discuss the collapse of acquisition talks with International Businestrss Machines Corp. and next steps for the company, according to a person familiar with the matter.

Chief Executive Officer Jonathan Schwartz and the board, including co-founder Scott McNealy, unanimously rejected a buyout offer from IBM last weekend that valued Sun at about $7 billion, the person said. The talks have gone quiet for now, the person said today.

Schwartz had a heated debate with McNealy, who was part of a minority group of directors that objected to the acquisition, the person said. McNealy, who co-founded Sun 27 years ago, turned over the CEO role to Schwartz in 2006. Schwartz wanted the deal to happen, although he concluded that it wasn’t in Sun’s best interest because the price was too low and there was little certainty that the merger would close, the person said.

“IBM would seem to be in the driver’s seat,” said Michael Shinnick of Wasatch Advisors Inc. in South Bend, Indiana. The firm manages assets of about $4.5 billion, including 1.1 million Sun shares. “I don’t think it’s likely other suitors emerge.”

Shawn Dainas, a spokesman for Sun, didn’t immediately return a call seeking comment. Edward Barbini, an IBM spokesman, declined to comment.

Sun Falls

Sun, based in Santa Clara, California, fell 22 cents, or 3.4 percent, to $6.34 at 3:49 p.m. New York time in Nasdaq Stock Market trading.

Schwartz, 43, is facing pressure to resuscitate earnings growth amid a slowing market for computer servers, the powerful machines that run company networks and Web sites. Sales at Sun, the fourth-biggest server maker, have slowed for four straight quarters and the company may post an annual loss of $1.24 billion this fiscal year, according to analysts’ estimates.

Sun’s shares have fallen about 25 percent since the two companies broke off merger talks over the weekend.

In a statement yesterday, Sun said it is “committed to its leadership team, growth strategy and building value for its shareholders.”

To contact the reporters on this story: Katie Hoffmann in New York at; Connie Guglielmo in San Francisco at

Last Updated: April 7, 2009 15:51 EDT

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To: Sr K who wrote (64800)4/7/2009 10:58:46 PM
From: Mark O. Halverson
   of 64865
Did Sun's total package kill the IBM deal?
By Gavin Clarke in San Francisco

Posted in Financial News, 8th April 2009 00:34 GMT

It's ironic but fitting that executive bonuses, a subject that's ignited popular anger against the very companies in Sun Microsystems' core customer base on Wall St, helped kill Sun's future.

It's been reported that a disagreement between IBM and Sun over post-acquisition packages for both chief executive officer Jonathan Schwartz and chairman and co-founder Scott McNealy helped sink a deal that sources last week told The Reg was imminent.

Schwartz and McNealy would have received a package of combined salary and - yes, incredibly for a company that's missed numerous boats and trod water for the past nine years - bonuses worth three times their annual pay.

Schwartz, whose been leading the failed crusade of first giving away Sun's software and then somehow monetizing it later, was last year paid a basic salary of $1m.

So far, Sun's refused to comment on what it's called rumors and speculation about a deal, while IBM's been unavailable for comment.

If the IBM deal did sink because of haggling over packages, it would be a sad comment either on the failure of the egos hanging on to their Ts and Cs or the overzealous lawyers arguing for their clients to see the bigger picture of giving Sun and its customers a decent future.

The talks - publicly at least, are off. This could, of course, be the continuation of negotiations by other means: both sides playing hardball, meaning a deal's still in the air.

There can, though, be no question that Sun entered this courtship as the weaker party so it's hard to see why IBM should be tempted to bite. Sun remains overstaffed, becalmed and still recovering from the last recession. Forbes has produced handy recap of six mistakes made by Sun under McNealy and new broom of Schwartz.

I'd add one more, as most people tend to overlook this: middleware and applications.

Software was ignored under McNealy for all his fightin' talk of taking on Microsoft. It only came into vogue under Schwartz, who had a passion for open sourcing Sun's assets and allowing the revolving door or talking heads to continue turning instead of tackling some root-cause problems by installing talent and devoting resources to the subject at hand.

The result has been that, when it comes to working out how to make money off open source, Sun is still rubbing two sticks together while IBM's walking around with a Zippo. Even Microsoft is managing to cash in on open-source, not by throwing open the gates and figuring out the details afterwards, but through a deliberate strategy of making Windows work better with open-source like PHP and Sun's MySQL database.

In measure of how far Sun's open-source strategy has failed not one of three organizations in Sun's core Wall St constituency attending lat month's Open-Source Business Conference said they were running Sun's touted Fedora clone OpenSolaris. Those companies were Bank of America, futures and options house the Chicago Mercantile Exchange and Wall St IT services specialist Fidelity Information Services.

At the best, OpenSolaris is penned up in the labs where it's used to benchmark hardware performance by the Mercantile Exchange. And if you think that bodes well for sales of more Sun-only servers in the long run, think again. BoA said while Solaris is its third-largest install base: "It's going to follow the migratory path to x86 that the industry is following."

Despite this, Sun's senior management still thinks projects like OpenSolaris are actually worth something. Bloomberg reported Sun's board: "Contended IBM wanted too much control over Sun's projects and employees before the deal closed, without providing guarantees that the transaction would be completed if it faced delays such as antitrust review."

If this is true, it sounded like Sun wanted to graft itself onto IBM and drag it down too.

However, IBM operates in the real world of profit and loss, and sources told The Reg categorically that IBM failed to get a satisfactory answer on which, if any, of Sun's software makes money.

The result was IBM staffers going through Sun's books and its portfolio couldn't recommend keeping any of Sun's software assets beyond what we reported last week - MySQL for systems, Java for licensing and continuity, and Solaris for the services business. It looked like projects such as OpenSolaris and others were heading to a community graveyard.

If Sun is playing hardball with IBM in the hopes of getting a better price and firm guarantees, then it'll be a long time waiting. There's no reason for IBM to buy any of the software projects Sun's attached so much importance to. And that will mean staff cuts.

Even Sun knows the reality - it's just in denial about the scale. In recent months Sun has had to cut staff involved in marketing and engineering on OpenSolaris and desktop Java as part of planned redundancies.

Only if Sun accepts the full facts, and quits playing the kind of Silicon Valley game that has given Web 2.0 services like Digg ridiculous assumed valuations based on nothing more than number or users and potential future revenues can Sun's own future resume in earnest, with IBM.

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