An “ouch” moment

/. indicated that as of this moment, Redhat is worth more (higher market capitalization) than Sun. So I checked it out.

As of this writing, RHT has a market cap of $2.62B, with $0.76B cash on hand. This suggests that the company has a value exclusive of cash, of about $1.9B. Not bad for a company that doesn’t actually make the technology behind its core product offerings.

As of this writing, JAVA has a market cap of $2.65B, with $2.63B cash on hand. This suggests that the company has a value, exclusive of cash, of about $20M.

I remember being at SGI when our market cap went below our cash.

IMO this makes Sun a ripe takeover target. A cash-poor/stock-rich company could swoop in, take over, and get capital. Once the market cap dips below the cash, I would bet that the phones of board members would be ringing from prospective purchasers who need cash, and maybe some sales folks. If this does happen, I would expect that quite a few people/products would be kicked to the curb.

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