News

posted on 14 July 2008 08:02

On the day it launched the world's first terabyte tape and a 4-core SPARC processor with Fujitsu, Sun Microsystems decided to elimiate 2,500 more positions. Its share price dipped below $9 and market capitalization went under $7 billion. Is it going to fall lower?

According to a report in the Telcom Tiger, the company has now decided to cut up to 2,500 positions world-wide. This could save around $150 million a year. Jobs will be lost at all levels.

On Friday morning the shares were at the $9.77 mark and the market cap' was $7.64 billion. Now they are at $8.93 and the market capitalization is at $6.98 billion. More than half a billion dollars of capitalization has gone south as market value is steadily leaking away.

On May 1 the shares were priced at $16.33. Then the Q3 under-performance was announced and the shares plunged to $12.64 by the next day. They recovered slightly, reaching $13.49 on May 15th, but have steadily lost value since then to today's low water mark. The company has lost nearly half its market value in just two and a half months.

Are we looking at a sub-$8.00 share price and a sub-$6billion market cap? How much lower can these numbers go before the Sun board reacts to this fall in value and decides that enough is enough?

Q4 and full year results will be anounced on August 1st.

^{[Chris Mellor.]}