Sun Stock Price to Quadruple
By Josh Simons on Sep 09, 2007
As you may have seen from its recent preliminary proxy statement filing on the SEC website, Sun currently plans to ask its stockholders to approve a 4-1 reverse stock split of JAVA.
To that, I say: It's about time!
As our stock rocketed into the stratosphere during the bubble, the stock split twice at least in part I assume to keep it within a reasonable price range. Now that our industry has moved past the unpleasantness of the dot com implosion, it's time to put the stock price back roughly where is should have been had that craziness not occurred.
To those who say this is more window dressing than substance, much like the recent change of our ticker symbol from SUNW to JAVA, I disagree. On both points, actually.First, while Sun's business is certainly much broader than Java, why not tie the ticker symbol to our most visible brand?
Second, while I'm sure the financial types have concrete reasons for such a split, from my perspective the psychological aspects of a five dollar stock price on employees and on those who watch JAVA are the real issue. True, the financials don't change materially with a split, but admit it, when you mentally compare Sun to another company don't you look at the relative stock prices as your zero'th order comparison? That isn't sensible, but psychology isn't always sensible.
The above was generated (minus the annotations) using Yahoo's new interactive charting tool. Stock splits are indicated by the small red "S" circles. Play with the live version of this chart here.