McNealy thinks he is Manny Ramirez, has another think coming

McNealy thinks he is Manny Ramirez, has another think coming

Summary: What happens next is that IBM offers a lower price, there are machinations to make it appear that it's not a lower price (some of the money is deferred) and Sun accepts the offer. Or it could go bankrupt.

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Sun decided to balk at IBM's reduced offer for the company on Saturday, and today IBM walked away.

A Sun source told The New York Times "it would no longer abide by its exclusive negotiating agreement with IBM."

Where did I hear that before, and recently? Exactly, Manny Ramirez. (Blogger Bookoldschool, from which I got this picture, reminds me that the Dodgers' original offer was $55 million.)

You remember Ramirez, the perpetually-disgruntled slugger on the downside of his career who engineered a trade out of Boston to the Dodgers last year?

A few months ago agent Scott Boras walked away from an LA offer of $25 million with an option for $20 million in 2010.

He would continue testing the market, Boras said. Problem was, there was no market. When Ramirez finally did sign it was for just what the Dodgers offered, and some of the money was deferred.

That's the situation McNealy and Sun find themselves in this morning, only worse. Because IBM in this case isn't the Dodgers, it's the Yankees.

Sun can make all the noises it wants about Cisco or HP, but that sounds a lot like Boras pretending the Giants were going to sign Manny. Or the Tampa Bay Rays. (Or my Atlanta Braves, or some Japanese team.) It wasn't happening.

Those other deals aren't happening for Sun, either.

Back when this started I predicted the final price would be "well south" of the initial bid, as in lower. IBM's due diligence apparently found contracts with "change of control" bonuses on an AIG scale, and it was right to lower its price accordingly.

What happens next is that IBM offers a lower price, there are machinations to make it appear that it's not a lower price (some of the money is deferred) and Sun accepts the offer.

Or it could go bankrupt.

Topics: Enterprise Software, CXO, IBM, Oracle

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9 comments
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  • did you misspell 'thing'?

    ... because that would make a lot more sense.
    ahl0003
    • No. It's a pun

      The old IBM slogan was "Think." I've used it
      here in the past.
      DanaBlankenhorn
      • Actually, "you've got another *think* coming" is the correct version!

        The phrase, "You've got another thing coming" is a mis-hearing of a line from a popular comedy, "You Can't Take It With You", by Kaufman and Hart. http://bit.ly/5YOUV. It may have originated earlier, but the correct word is "think", not "thing".
        znmeb
        • That works, too...

          I knew about "You Can't Take It With You" (1938
          Oscar winner for best picture), but I was also
          thinking about the IBM "Think" signs which are
          contemporaneous. I have used a picture of Thomas
          Watson Sr. scowling in front of one several
          times here.
          DanaBlankenhorn
        • *nods*

          Yup...
          http://onideus.blogspot.com/2008/11/no-room-no-room.html

          "Then you've got another think coming. Would you like to take it right now?"
          Onideus_Mad_Hatter
  • Indeed

    Of course it is not entirely clear if McNealy
    is to blame, or if the owners (an investment
    fund) rejected the offer.

    Even so, Suns problems have been accelerated a
    lot by this. It may not be fair, but it's
    reality.

    Who will buy Sun if you don't know if they'll
    survive this year? Especially if you were
    already considering alternatives. If you have
    money to burn in a down economy you should make
    damn sure that they are used correctly.

    Who'll bet their next big mission critical
    project on Java now? Yeah, Java will for sure
    survive in some form or another because so many
    depend on it. But who'll foot the bill for
    advancing it so that it doesn't fall even
    further behind .NET? The ensuing uncertainty
    will tip the on-the-fence projects to other
    technologies, losing those forever.

    Whether or not McNealy is to blame for this
    one, he certainly is to blame for some of the
    other mistakes. Sun has never made Star/Open
    Office profitable. During his megalomania
    heydays he wanted to undermine the Microsoft
    Office cashcow. He wanted to go head-to-head
    with the big one. He may have restored some
    healthy competition in that space, but was it
    the best for Sun?
    honeymonster
  • McPuke is not Manny

    Manny actually brought a championship to Boston before acting like a total scum bag. McPuke was always a no talent moron who was in the right place at the right time. Just go back and look at McPuke quotes over the last 10 years, and it's insanely obvious that the guy belongs in a mental institution.
    jackbond
    • I didn't say he was

      I think I implied he's Scott Boras. Sun itself
      is Manny.
      DanaBlankenhorn
  • Logical Move: Cash plus IBM stock

    "What happens next is that IBM offers a lower price, there are machinations to make it appear that it?s not a lower price (some of the money is deferred) and Sun accepts the offer.

    Or it could go bankrupt."

    For the deal to go through, IBM would have to put together a deal that appeared to be valued above $10 a share. Less, cash more IBM stock. Sun is losing money so IBM has to conserve cash for Sun operations, not Sun acquisition.

    Jim Callahan
    Orlando, FL
    Jim.Callahan