Sun climbs buyback mountain
$3bn 'I can't quit you' for investors
Sun Microsystems will appease investors with a whopping $3bn share buyback.
Investors and analysts have long wondered when Sun would direct some of its close to $6bn in cash toward repurchasing shares. Well, they've got an answer of sorts now with Sun committing to the $3bn figure but failing to provide a buyback roadmap.
"The stock repurchase authorization does not have an expiration date and the pace of repurchase activity will depend on factors such as levels of cash generation from operations, cash requirements for acquisitions, repayment of debt, current stock price, and other factors," Sun said in a statement. "Sun may repurchase shares from time to time on the open market or in private transactions, including structured transactions."
Over the past few years, Sun has preferred to put cash toward acquisitions, including the large purchases of StrorageTek and SeeBeyond, along with a host of smaller buys. We consider Sun's acquisition track record spotty at best - cough, Cobalt - and think it's about time Sun provided investors with a direct reward.
Word of the buyback kicked Sun's shares higher close to 3.5 per cent, at the time of this report, during after-hours trading. ®