Mar
18
2009
18
2009
My perspective on SUN and IBM merger
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From an investor point of view merger are always bad. The reason being that instead of the investor controlling the type of stock he wants to buy, the merging parties start controlling it.
However in this case. Both companies have solid balance sheets excellent products and services and were in my top stock list always. Therefore the merging company is also a strong buy
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That’s fair enough.. my apologies for being so dismissive.
It is an opinion forum so I’m at fault.
I nevertheless feel that there are more complex aspects to this merger
than just balance sheets, good products/services.
Management is a huge aspect that needs to be carefully looked at if
this merger is to succeed [ATI/AMD didn't merge together too well, for
example, albeit on a vastly smaller scale].
Excellent products and services didn’t do any good to Sun’s share
price over the last year so what’s to say Sun will be any good for
IBM’s already strong position.
Maybe IBM sees value in Sun’s hardware technologies and intends to use
this asset to reposition itself as a predominantly hardware company
again. I bet IBM feels that, if Sun’s product lines were better
marketed and managed from a Sales and CEO point of view in the last
12/24 months, Sun wouldn’t be in this currently weak position.
IBM probably sees that the responsibility for Sun’s currently weak
position lies squarely with Schwartz and that if he got ‘bumped’ in
the merger/takeover, the new Sun arm of IBM would gain in strength
immediately by this alone [and that's not even noting Schwartz's huge
salary that wouldn't have to be paid!]. An IBM guy would competently
take over his job.
I do hope the merger works out well for the share price as I have 400
shares@$8.97.