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!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

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

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?