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Sun Micro slides after Reuters Dealtalk on firm’s dwindling options

Reuters was alone on Nov 11 with a Dealtalk that said Sun Microsystems could try to sell itself or dispose of some assets, but that buyers for the company are unlikely given the credit markets and challenges related to valuing Sun’s businesses. Citing banking sources, the Reuters Dealtalk provided exclusive and in-depth information about who Sun’s potential acquirers are and what the price tags of individual businesses could be. The following morning, Sun’s shares began their slide, falling 5 percent to their lowest point since April 1995 as skeptical investors pulled out of the stock. The stock then continued to fall further amid a broader market swoon, closing down 10 percent — double the drop in the Nasdaq. An options report from Schaeffer’s Research cited the Reuters story and linked it to heavy put volume, saying traders are fearful Sun won’t find a buyer. Three risk arbitrageurs called the reporters seeking more information.

Article Tags
Type: Reuters Best
Sectors: Equities
Regions: Americas
Countries: US
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