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Available To The Right Buyer: Sun Microsystems
antediluvian writes "The Seattle Times reports Sun Microsystems shares surged forward on speculation the computer maker may be bought by a rival company. Prospective buyers could include Dell, IBM or Hewlett-Packard. Computer sales of rival companies have been outpacing sales of Sun's machines. Over the past three years Sun's stock has declined 92 percent."
N1 is a new IT architecture from Sun. I think it is awesome new technology/architecture, but I also think there is no market for that currently. N1 was in wrong place at the wrong time. There are lot of other things that need to be done before N1 can be implemented anywhere.
What will happen to N1 after the acquisition? IBM already has a similar product callled Tivoli. If IBM purchases Sun, N1 will either be slashed or integrated into Tivoli. Any thoughts on that?
Consensus is good, but informed dictatorship is better
An institutional buyer made a large purchase of Sun Stock. That fueled rumors about a buyout, but it seems a lot more likely that after reporting (admittedly very modest) profits in the last quarter and one analyst recently shifting Sun to buy, some institutional buyer wanted to get some "bargain" stock that they think will appreciate well in the coming years. Given how steady the stock price has been between 3 & 4 dollars, it does seem likely that it's bottomed out, so unless you think Sun is imminently going out of business (which I sure don't) this kind of buy seems to make sense more from that standpoint than from any bs about being bought by a bigger player.
As far as it goes, Sun's culture is so antithetical to IBM and to the "new" HP that I can't see either of them wanting to take Sun on....
7 November 2006: The day Americans realized corruption and incompetence weren't addressing 11 September 2001
At UBS Warburg, Jack Francis, co-head of equity trading, said the sudden surge in price followed a 5-million-share block trade, considered to be a very large buy by Wall Street standards. "That was spurring stories of a potential takeover, which doesn't make any sense at all but did add fuel to the upside," said Francis. "The rumor doesn't hold a lot of weight, but in a market like this it gets people off the fence who are looking for any story that could generate alpha."
Anyway, Sun are currently valued at $12Bn, and have $5.5Bn sitting in the bank.
These kinds of rumors are a recurring phenomenon in this industry. Check for example "When will IBM buy Sun?" which is over a year now.
Sun has a market capitalization of around $12 billion (at its current stock price of $3.75).
To buy it with a good premium would mean a huge investment.
And considering that Sun always stands alone and that its products -- hardware as well as software -- are not really compatible with the rest of the industry, anyone who would buy Sun would only buy its customers. But for how long?
Sun customers are among the most loyal ones.
And you can believe me: I was working for one of its competitors.
While I hate to say HP-UX is a good OS, it is certainly an OS which runs on Itanium and supports 64 processors.
The new HP Superdome machines with Itanium2 are more powerful CPU-wise than anything Sun makes at the moment.
Ewan
Here's what people don't understand: When it comes to SPARC it's not about pure Mhz, it's about being efficent.
Check out the SPEC scores. SPARC 1.2 Ghz have the same score a Pentium 4 2.4 Ghz. We all know about lies and benchmarks, but it seems to show that Mhz isn't the whole story.
The other thing people miss is the future. I would suggest checking out this article about Niagara. If Sun pulls this off, it will be *huge*.
I don't see Sun being purchased anytime soon or at least not in any kind of a mutual agreement. They have plenty to keep going for, both currently and in the future.
I don't think you really understand Sun's core business. It's got nothing to do with the desktop and everything to do with servers.
Sun is hurting because now I can replace my low-end and midrange boxes with commodity x86 kit running Linux for about 10-15% of the cost.
At the mid-to-high-end (16+ processors) Sun is still viable and a good choice (I haven't seen good Intel kit that scales over 8 processors), but the volumes in that market probably aren't enough to sustain the required R&D effort, especially as Sun's consulting business - which would push their kit - isn't great. Still, I like our E10000s... they do the job we ask of them pretty well.