Eclipse Authors: Pat Romanski, Elizabeth White, Liz McMillan, David H Deans, JP Morgenthal

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Open Source Cloud: Article

McNealy and Schwartz Dismiss Rumor They'll Be Taking Sun Private

"Maybe Sun Should Be Slower with the Cold Water," Comments Maureen O'Gara

Quoting an unidentified hedge fund manager supposedly "close to McNealy" - well, maybe he was before the story hit - BusinessWeek caused a bit of a brouhaha last Friday when it said Sun was considering using its $7.5 billion stash to go private at $5-$5.50 a share with the help of LBO maven Silver Lake Partners - the place its ex-president Ed Zander retreated to before going to Motorola. The story said Sun would then shrink itself by selling assets, bolster its core product lines and go public again a la the great Silver Lake-engineered Seagate resurrection.

Sun rushed to deny it.

Throwing cold water on the notion, CEO Scott McNealy said, "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? I will bet this hedge guy is laughing his butt off that BusinessWeek printed this as he profits from the 42-cent rise in the price this morning."

Sun president and COO Jonathan Schwartz told the Wall Street Journal it was a "complete joke."

Considering the performance of Sun's stock, however, it would be irresponsible of Sun not to at least think of such a thing.

Meanwhile McNealy told the Spanish newspaper El Pais that Sun, which you'd think would be looking for somebody to buy it, is going to start making some more acquisitions. "We have made some small purchases," he told the paper, "and we are going to make some bigger ones which generate more revenue."

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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Most Recent Comments
Brad Hutchings 05/17/05 02:02:00 AM EDT

If my business were playing in markets that SysCon covers, I would be more than happy to advertise on pages with Maureen's stories. Think of the advantage. Instantaneously, you get rid of all the potential whiney open source fanatics via boycot. No need to waste your time with "customers" who are just going to be high cost anyway. As a bonus, you get material with a sense of humor. Ever notice how people with money and control tend to be funnier than geeks who sit in closets all day?

Attention Sys-Con 05/10/05 05:44:45 PM EDT

While you made a correct step in removing the article concerning PJ, and dumping O'Gara on her wrinkled ass, you're not finished.

1- Everything O'Gara must disappear.
2- A public front-page apology to PJ for allowing publication of the article.

Only until those are done will we believe you are serious.

Matthew 05/10/05 09:59:12 AM EDT

I find it fascinating that the people posting feedback do more research into the story than the "journalist" writing it. That says something about Maureen's skill as a journalist, doesn't it? Random people surfing the web are better at constructing an article than she is, that a simple Google search reveals relevant information about a story that PJ's Stalker can't be bothered with.

Warning 05/10/05 09:57:09 AM EDT

Maureen O'Gara is a bought and paid-for SCO whore. Even if a tiny grain of truth manages to appear in any of her writing (you know, the rare exception to the rule), better to get your news elsewhere.

Sys-Con, we await the complete removal of O'Gara from all your sites, as well as a public front-page apology for the slanderous stalking drivel you allowed her to post about PJ.

The One Who Knows 05/10/05 09:40:15 AM EDT

The only reason anyone may read an article by Ms. O'Gara is exactly the same people go to see a freak show. I cannot imgine buying from an advertiser who places his ad next to her drivel. If you want me to read anything on this site, please get rid of the "journalist".

stats_for_all 05/10/05 09:38:42 AM EDT

The "Inside Business Week" columnist who floated the story was Gene Marcial. He also was responsible for quoting Jonathan Cohen, of JHC Capital, on an "impending" buyout of SCOX.

Cohen has business ties to a hedge fund run by Steve Novak, Palladio Capital. It is speculatively possible that the same criminals pumping SCOX are also responsible for this rumor on SUNW

Gene G. Marcial is the same journalist who featured Cohen investments in SCOX (June 23, 03), RCOM, TREE and Verity (8/5/02). These articles are cookie cutters, they report rumors of imminent buy-outs, smart mutual accumulation etc.
Cohen may also be the anonymous "money pro" in the MOBI pump from Sept 2004, with the prerequisite accompaning Marcial article. Cohen's fund and a private hedge he operates bought MOBI positions just prior to the appearance of the article. IBM was the rumored buy-out partner for MOBI.

In summary, the 2003 CYBS rumor is the work of a interested party who has used an identical MO to support the price of stocks within his portfolio and curry favor from friends during a crucial fund raising period.

SCOX rumor: www.businessweekcom/magazine/content/03_25/b3838120_mz027.htm
VRTY rumor: www.businessweekeuropecom/magazine/content/02_31/b3794141.htm
MOBI rumor: www.businessweekcom/magazine/content/04_38/b3900140_mz027.htm
RCOM rumor: www.businessweekcom/magazine/ content/01_51/b3762147.htm
TREE rumor: www.businessweekcom/magazine/content/02_05/b3768123.htm

Other rumors: moneycentral.msncom/cnbc/tv/stockpicks/ spsummary.asp?id=249&name=Jonathan+Cohen

OGara Sucks 05/10/05 09:31:28 AM EDT

Her shameful 'expose' is now gone from the site. I await the coming lawsuit from PJ.

Warning 05/10/05 09:02:30 AM EDT

Maureen O'Gara is a bought and paid-for SCO whore. Even if a tiny grain of truth manages to appear in any of her writing (you know, the rare exception to the rule), better to get your news elsewhere.

Sys-Con, we await the complete removal of O'Gara from all your sites, as well as a public front-page apology for the slanderous stalking drivel you allowed her to post.

Donald Hsu 05/10/05 06:50:32 AM EDT

Maureen is right. The problem with Sun is the leadership. Times have changed. You need a new CEO. Can Schwartz do the job? No one knows. The better alternative is to sell Sun to Oracle. Oracle has a markt cap $60 bn and Sun is about $13 bn. Oracle 10i is written in Java. If the two firms combine, there is plenty of synergy. It is a win win situation for both.

Warning 05/10/05 05:09:16 AM EDT

Maureen O'Gara is a bought and paid-for SCO whore. Even if a tiny grain of truth manages to appear in any of her writing (you know, the rare exception to the rule), better to get your news elsewhere.

Sys-Con approves of stalking, and even happily posts "news" written by a stalker. Is this the kind of place you want to get your news from?

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