Sun Rejects IBM Takeover, Shares Tank

Author
Aron Schatz
Posted
April 6, 2009
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31917

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Sun is really heading to the bottom of the bin. Just one day after rejecting IBM's buyout offer, the stock is trading near $5. Sun was at $250 not too long ago. Unlike Yahoo, though, Sun has been losing money every quarter. Really, Sun needs to do something.

Quote

Potential backlash from failed Sun-IBM negotiations could include a distraction by Sun's management and board in justifying their decision to reject an offer with a high premium, rather than focus on their struggling business, Sacconaghi noted.

The IBM-Sun buyout talks durig the last two week of March, the end of Sun's quarter, could make its fiscal third quarter challenging, given that up to 40 percent of Sun's revenue is generated in the last two weeks of a quarter, Sacconaghi stated in his report, noting customers are likely to have lingering concerns about Sun's future.


It is also not known if the deal would have been allowed to go through. IBM+Sun would be a monopoly in a few markets. Not that it seems to matter in this country...

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