Comments on: Decision time

By: Tim

Tim — Fri, 10 Oct 2008 19:14:29 +0000

I think the standard response to these kind of questions is: if you didn’t have those shares already, would you buy them again now? If not, you should probably sell them (irrespective of whether you’ve made a loss or a profit so far).

Chances are, of course, that the stock is oversold just like the rest of the market and will go up again when the market goes up, whenever that may be. Even if you believe that, I’d only ‘top up’ if your answer to the above question was a resounding ‘YES!’.

Myself, I think Sun’s just an awful stock to own. I can’t see an exciting growth story there, nor do I see a come-what-may-type reliable income/dividend story (mind you, this is just my gut feeling; I don’t follow the company or news around it, nor have I ever looked at its balance sheets).

By: Glynn Foster

Glynn Foster — Fri, 10 Oct 2008 18:50:15 +0000

I think you’d have to work at Sun to fully appreciate the shift that the company has gone through in the last couple of years. I’m optimistic, and to some extent I always have – the current economic crisis isn’t helping the market at all, but where there’s a crisis, there’s an opportunity…I’m far from selling yet.

By: Dave Neary

Dave Neary — Fri, 10 Oct 2008 16:20:19 +0000

Sun guy,

I have to disagree with you there. Trend lines, maybe, but magnitude is not the same. When the Nasdaq sneezes, Sun catches ebola.

6m: Nasdaq -32%, Sun -67%
1yr: Nasdaq -43%, Sun -79%
5yr: Nasdaq -17%, Sun -66%

On that 5yr chart, Sun’s had some ups & downs, and was ahead of the Nasdaq as recently as Summer 2007, but has since plunged from $25 a share to $5 a share, while in the same time, the Nasdaq’s “only” lost 40%.

By: Sun Employee

Sun Employee — Fri, 10 Oct 2008 15:40:37 +0000

Because they’re one of the most-traded stocks on the market, in recent years Sun’s share price has tracked the NASDAQ’s performance a lot more closely than it has Sun’s own fortunes.

So really, you should worry more about what you think the NASDAQ is going to do, than what Sun is going to do.

By: Jerome Haltom

Jerome Haltom — Fri, 10 Oct 2008 14:36:11 +0000

I would hold the investment. Investments are long term. Sun has a huge amount of assets. From brand name, to product lines, to marketing teams, to programmers, to patents, etc. They will not vanish over night (unless there are accounting tricks being used, etc). You should not have invested in Sun if you did not intend to hold it till the end. Even if somebody purchases them, they’d be buying all their assets, including their investment obligations, and the return on those obligations somehow filters to you.

By: Hub

Hub — Fri, 10 Oct 2008 13:27:52 +0000

I think I’d either wait for an acquisition (still wondering who would) or just cross fingers. Selling at lost, it depends of the amount, but I’m not sure it is worth it.

By: Geoff Teale

Geoff Teale — Fri, 10 Oct 2008 12:53:58 +0000

I would have to say that I see the problems being pretty deepset. The momentum at Sun is downwards now. Sun held on for too long with it’s luxurious R & D and acted like the first internet boom had never ended.

Sure they’ve got some great tech, and their trying their best to rescue Solaris from the brink, but where’s the revenue stream and how does it grow.

I suspect that Sun will continue to sink, leveraging it’s long term customers for a core revenue stream and then semi-stabilise as a much smaller company. At that point I think they’ll become a very attractive buy for someone, possibly Oracle, IBM, Apple or Red Hat. MySQL might give them some new life, but I just don’t see it being enough to make Sun a major player in the future.

Shame really, the era of the old proprietary UNIX vendors is all but over. If it weren’t for Linux and Mac OS X I’d be very sad.

By: dcg

dcg — Fri, 10 Oct 2008 12:01:37 +0000

What I think it’d be sad is that when/if Schwartz gets fired, sun could get a new ceo that thinks that supporting opensource was an error.

By: AH

AH — Fri, 10 Oct 2008 11:23:24 +0000

I doubt anyone knows for sure which way it’s going to go, but it doesn’t strike me as likely that Sun are going to be posting decent earnings for a while.

Personally, I would sell in anticipation that they’re going to go down again further, and only think about buying back when it looks like they’re on the mend again.

Depends how long a game you want to play, though. I don’t know who would take them over, but I guess you never know.