Feeds

Sun shares surge on 'joke' that firm will go private

Hedge-fund hilarity

  • alert
  • submit to reddit

New hybrid storage solutions

Shares of Sun Microsystems shot up more than 10 percent Friday and then held some of the gains on speculation that management is looking to take the company private. CEO Scott McNealy told one organ that such rumors were much closer to fiction than truth.

In a gossip column, BusinessWeek cited a "hedge-fund manager close to McNealy" as saying that Sun was hoping to work with Silver Lake Partners to push Sun private with the aim of reemerging one day as a leaner, meaner public company. The rag cited an LBO (leveraged buyout) offer of $5 to $5.50 a share for Sun.

Sun's former president and current Motorola CEO Ed Zander was recently a managing director at private equity fund Silver Lake Partners.

Such ties, however, shouldn't be grounds for believing the hype, according to McNealy.

"Why would a supposedly credible rag like BusinessWeek quote an anonymous hedge fund guy on a totally unsubstantiated rumor designed to spike the stock price?" McNealy asked CNET. "I will bet this hedge guy is laughing his butt off that BusinessWeek printed this as he profits from the $0.42 rise in the price this morning."

McNealy did not respond to our request for comment at the time of writing.

Sun's President Jonathan Schwartz was even more blunt in an interview with the AP.

"It's a complete joke," he said.

Shares of Sun have languished between $3 and $5 over the past couple of years as the company has struggled to post profitable quarters. Sun's quarterly revenue has fallen dramatically from the dot-com boom times, and it is now trying to replace some lost Unix server sales with new sales of x86 hardware.

For a long while, rumors circulated that Sun was a potential takeover target, but such speculation largely died down. McNealy made it clear that he was prepared to stick with the company he co-founded for the long haul. Sun has more than $7.5bn in the bank, which puts it in a relatively strong financial position despite stagnant sales.

Shares of Sun were still up more than 7 percent at $3.70 at the time of this report. ®

Related stories

Hungry Sun customers must wait to feast on 'product hog heaven'
India, China poised to feast on US IT complacency
The dual-core x86 server era begins thanks to AMD
Ballmer: Interoperability, interoperability, interoperability

New hybrid storage solutions

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Forget silly privacy worries - help biometrics firms make MILLIONS
Beancounter reckons dabs-scanning tech is the next big moneypit
Microsoft's Office Delve wants work to be more like being on Facebook
Office Graph, social features for Office 365 going public
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.