Saturday, June 04, 2005

Barron's Online - Plugged In: Is Sun's Big Deal a Big Zero?

Barron's Online - Plugged In: Is Sun's Big Deal a Big Zero?: "Still, this acquisition is a bit of head-scratcher. Sun is spending more than half of its cash to buy a slow-growth company that won't do much to bolster server or software sales. The deal, which is supposed to close in the late summer or fall, isn't expected to give Sun's earnings a lift for another 12 months after closing, but even when it does, it's likely to add just one or two cents a share. That isn't something to shout about. In fact, it's a little pathetic.
'Sun has come a long way from being the 'dot in the dot-com' with hypergrowth to acquiring a company in the tape-drive business because the return is a few pennies per share better than the return on its cash,' writes hardware analyst Andrew Neff of Bear Stearns."

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