Sun's biggest investor gets two new seats on board

Sun Microsystems has agreed to let its largest shareholder name two new independent directors to Sun's board.

Sun Microsystems' largest shareholder, which has been agitating for change at the company, has reached an agreement with Sun to appoint two new independent directors to Sun's board, the companies announced Monday.

Southeastern Asset Management, which holds about 22 percent of Sun's common stock, will be permitted to nominate the directors, who will then be jointly approved by the two companies. The directors will be appointed "as soon as is reasonably practicable," the agreement states.

Like other Sun investors, Southeastern has been unhappy with Sun's performance of late. Its stock price has sunk from more than US$20 about a year ago to a close of $3.49 last Friday, as the company struggles to grow revenue and maintain a profit.

In October Southeastern upped its stake in Sun and changed its ownership status in a way that allows it to play a more active role in Sun's management. It also said it had been meeting with Sun's management about ways to "maximize the value of the company."

That fueled speculation that big changes could be in store for Sun, including potentially a sale of part of its business or a change in its leadership. None of those changes have materialized, and Southeastern now says publicly at least that it supports Sun's strategy and top executives.

"We fully support Sun's CEO, Jonathan Schwartz, and his leadership team in their efforts to continue driving near-term efficiencies and long-term growth," Southeastern said in a joint statement with Sun.

It pointed to Sun's more than $3 billion in cash, and said products like its Open Storage line-up, MySQL database and new Niagara servers represent big growth opportunities.

Sun reported a loss of $1.68 billion for its most recent fiscal quarter, blaming the global economic crisis and the chaos on Wall Street in particular, where it does much of its business. Last month it announced a plan to lay off up to 6,000 workers, or 18 percent of its workforce, in an effort to slash costs.

Southeastern invests in companies that it believes are trading at "a big discount to their intrinsic worth," Jason Dunn, Southeastern's vice president and principal, said in a podcast posted to Sun's investor Web site.

"We're buying these companies when their assets aren't recognized by the market," Dunn said. "We find such an example of this in Sun."

The news gave Sun's stock a lift. Its shares were changing hands for $3.85 Monday afternoon, up 10 percent from Friday's close.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Sun Microsystems

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?