Nothing At Sun (JAVA) Has Worked

Shares in Sun Microsystems (JAVA) have sputtered to a 52-week low of $17.25 down from a period high of $27.12. It would be hard to find a company that has worked harder to get its shares up.

Sun reverse split its stock on the theory that being over $10 would attract more institutional investors. That does not appear to have worked. The company also changed its symbol from SUNW to JAVA. No heartbeat there.

Sun said that it would buy-back as much as 16% of its shares. Lower float, higher EPS. No takers.

According to The AP, one of Sun’s problems is that it is in an industry which is not growing very fast:  “Factory revenue in the worldwide server market grew just half a percent in the third quarter to $13.1 billion — the slowest rate since the first quarter of 2006, according to research firm IDC.”

The markets have hoped that Sun’s move toward marketing more open source software would pay off with customers. Right now, there is little evidence of that. In the last quarter, Sun’s revenue was flat and operating income showed a modest improvement, mostly due to cost cutting.

Sun is a press release machine. It issues about ten PRs a month. Perhaps it should relieve its investors of having to read all of those and just make them some money.

Douglas A. McIntyre