The Sun Doesn't Set Just Yet
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Instead, the result has industry analysts wondering if there's a new deal in play for the embattled Silicon Valley pioneer.
Shares of Sun (NASDAQ: JAVA) opened the day down around 25 percent to $6.30, but its share price held steady throughout the day, hovering between $6.36 and $6.72.
"That stock should have cratered and stayed cratered," industry analyst Rob Enderle of the Enderle Group told InternetNews.com.
More remarkable was how many shares changed hands. Based on the averages from the last three days, about 19 million Sun shares traded hands on a daily basis. But today, 92 million Sun shares traded hands, a four-fold-plus increase.
"The fact that it's holding up and all these shares trading tells me they are in play," Enderle added.
It's not clear just who's buying. "I haven't seen any names popping up," Brian Sozzi, research analyst for Wall Street Strategies told InternetNews.com. "If anything, I'd have to say IBM or maybe a Cisco is making a run."
One possibility, observers say, is that it could be some persons or entities looking to get around ownership -- which might have been a key obstacle to Sun's closing a deal with IBM.
Numerous reports have pegged co-founder and chairman Scott McNealy as doing what Jerry Yang did to Yahoo's offer from Microsoft -- creating so much resistance that it scuttled the deal. With 14.5 million shares in his possession, according to the last annual Sun proxy statement, McNealy holds 2.3 percent of the company and a major controlling interest.
However, McNealy is not the largest shareholder. Southeastern Asset Management, an asset management fund, holds 17.3 percent of Sun shares. The company changed its status last October, indicating it would take a more active role in the firm. Thus far, it has been silent throughout the deal.
Southeastern Asset Management did not return calls from InternetNews.com seeking comment.
Reports after the merger's breakup suggest that McNealy, who served as CEO of the company until 2006, had been behind the scuttling of the deal while Jonathan Schwartz, the current CEO, had wanted it.
The rumored reasons for McNealy's resistance are as numerous as the leaks surrounding the deal: IBM wanted too much control; Sun wanted too much executive pay; IBM was going to tear Sun to shreds; there was a disagreement over the sale price.
Or McNealy could have held out for entirely different reasons.
"I think some of it, honestly, is 'It's my baby,'" said Clay Ryder, president of the Sageza Group. "It's an emotional attachment than a financial/logical one. I'm not saying that to be critical of Scott. Sometimes, as a human being, we do things that don't make sense, but we do them anyway."
Page 2: Assessing Sun's next moves