With the doubling from the JAVA stock price upon March 18, 2009 based on a Wall Street Publication report that IBM is bidding to purchase Sun Microsystems, and using the StockTradersPlace sell action comments on March 21, one open question is 揝hould typically the stock be shorted?? Here is where other factors have to be considered beyond technical test. With speculation that other companies such as Hewlett-Packard (HPQ) as well as Cisco Systems (CSCO), among others, may want to pay for Sun Microsystems, a putting in a bid war can emerge. For this reason, it is probably harmful to short the stock at this point, although selling the extensive position holding is the prudent thing to do.
I continue to turn out to be amused by corporate acquisitions and the price paid for this kind of actions. I was involved in such a scenario in 2001 (at the onset from the tech/telecommunications industry meltdown) the spot where the company I was working for ballooned to 95, 000 employees largely about the contribution of various corporate acquisitions leading up to year 2001. Today, that company has less than 32, 000 employees and has filed for bankruptcy safeguards.
The previous paragraph wasn't meant to suggest a similar fate for IBM nevertheless was simply old memories coming over for the fore as this specific Sun Microsystems acquisition is reported. The price is high at $8B. There will be corporate culture clashes and integration issues, as well as clean conflicts in technology when it comes to Intel and Advanced Micro Devices microprocessors used in IBM server products versus ultra violet rays Microsystems SPARC architecture microprocessors.
And what is the latest craze with the help of Sun Microsystems anyway? Well, Sun抯 legacy is in engineering workstations and server items. But in 2007, Sun changed its commodity symbol from SUNW towards JAVA to clearly re-orient the company strength and leadership within the JAVA programming language. As significant as the JAVA technology is in the Web computing industry, one must continue to question the direction they intend to make money from this. As an investor/trader, that is the most important question so that you can answer.
It will be very interesting indeed to see how this unfolds if IBM does land up acquiring Sun Microsystems. Will IBM then customize JAVA for its own internal purposes, thereby creating a potential issue with typically the open JAVA standard? How does IBM intend to get well the $8B spent predominantly on the acquisition of the ESPRESSO technology which rightly belongs while in the domain of open requirements.
As an investor/trader from JAVA now and IBM now and in the future, the company fundamentals are incredibly important to analyze other than the technical analysis signs. This is the time for them to avoid being over-focused at technical analysis alone.
Copyright? Mar 2009 StockTradersPlace. com
