Southeastern Asset Management, and its more famous subsidiary Longleaf Partners, has become Sun’s largest shareholders, with a 14% stake.
Statements from current and former Sun CEOs Jonathan Schwartz and Scott McNealy indicate that they don’t think Wall Street “gets” Sun so they might be amenable to a take out. On the other hand, an investor buddy scoffs at the notion that Southeastern would be party to this. Asked why it has taken a big stake in Sun, he said Southeastern “owns 14% of a lot of things.”
Sun stock is trading just north of $10.00 a share after a reverse split last year. No wonder there’s speculation. Or wishful thinking?
Several Sun partners talking about the company’s big channel change last week said Sun, in its push to be hip and take advantage of its Java cred, seems to have forgotten it is a hardware company. The switch to the Java ticker symbol still gets their goat.
For all of the Java stuff, and now the open source stuff, Sun remains, at its roots, a maker of powerful hardware. That is something VARs can sell and hopefully make margin. Sun-exclusive server partners applauded last week’s news about it opening up all but its largest national accounts to partner fulfillment, others threw up some red flags.
This move opens Sun up to significant risks, said one observer. Many Sun partners are not exclusive. They offer HP or IBM or even Dell hardware. Once those VARs are brought into potential Sun accounts, what’s to say they won’t entertain bids for other brands? Of course, the way things have been going for Sun, most of those accounts probably already run HP, IBM or even Dell hardware already.