Now The New York Times’ Deal Book has picked up on my Google-Sun analysis:
The prospects that search engine giant Google is due to buy the U.S.’s most sophisticated hardware company “have been swirling around trading floors and Silicon Valley for more than a week,” reports the credible periodical in the Deal Book’s blog. “Shares of Sun, which has a partnership with Google to develop and distribute each other’s technology, spiked up about 4 percent last week as a result of the rumors.”
The analysis is making a serious impact upon the market, and now I have received an e-mail from an inside source in corporate finance who wishes to remains anonymous for the time being.
First though, a re-cap and more information on the analysis:
Is Google About To Buy Sun Microsystems?: this article originally appeared on Iowa Voice, the U.S.’s largest Republican blog where I am a Guest Author, and started all the speculation.
Will Google Buy Sun Microsystems Part II: a further look at the increasing liklihood that Google will buy Sun Microsystems
Does personal e-mail from Sun exec reveal Google is about to buy Sun Microsystems?: this, on the Biz/Tech watch Featured Column here at Blogcritics, was the ultimate clincher, drawing in thousands of readers, and moving the price of Sun Microsystems up by $500 million in four days.
The prices of Sun and Google are moving further and further apart, too, as the market is realising what may be truth in the rumour: at close of trading yesterday, Sun was up and Google was down again, a rare phenomenon by any standards.
The New York Times’ Dealbook blog is the most authoritative source of financial information on Wall Street, and the very fact that my comments — name attributed — have appeared there adds a phenomenal sign of credibility.
And there is more food for contemplation. Last weekend I had an intense conference call with analyst Mark Stahlman. Stahlman is brash, arrogant, hard-hitting and strangely compelling in his convictions; he has the voice of a converting zealot, and you can hear the persuasive overtones of that conviction even as he listens acutely to what you say. Stahlam is Wall Street’s largest tech analyst: this is the man who introduced Eric Schmidt to Wall Street deal-makers when Schmidt was a mid-level hardware manager working late nights over a plasma screen, Starbucks in hand. He was also the one who put out the financial projection for Google, famously adopted by the company itself that it would “one day become a $100 billion company”. The analysis confused many — as Google currently stands at that valuation anyway — but the reason was simply because it did not come from them: it came from the zealot. A man who regularly wines and dines with Schmidt — Stahlman is closer to the action than any.
“Google is going into Financial Services and Healthcare!” he exclaimed over the lengthy conversation. “This is the last stage of the Java project!”
If Stahlman’s consensus that Google’s foray is indeed into “last stage of the Java project”, then the company is going to need massive hardware storage to develop this capability — financial services and healthcare is no small-time show. The logic is obvious when one considers where the highest consumer cost burdens and pending technological disruptions currently lie — with a huge round of technology combining software and hardware, the scenario of practically free financial services and healthcare all delivered to the front door looks suddenly feasable. (E-mail me if you want a copy of the analysis). In a strange twist, such moves are totally consistent with Bernstein’s political analysis in his excellent and radical new book The Capitalist Manifesto.
The move is not right for Google as it stands alone, but is perfect when one considers hardware to provide the engine for the G-drive platform. Here is a leaked powerpoint surreptitiously embezzled by Google moments after they realised they had made the mistake of releasing it. I have located a copy. (Again, E-mail me if you want a copy).
A corporate finance executive close to the action who wishes to remain anonymous e-mailed me shortly afterwards with the revelation that the takeover will probably involve 35 shares of Sun for 1 of Google’s and that my analysis was “spot on”. At this point I am not at liberty to share any more of the e-mail, but by all accounts, Google is Sunny.
GoogleOS may be coming sooner than we think.
*UPDATE Important Disclosure*: i do not have a license to promote stock, and am in no way promoting anything. I do not personally own any shares in Google or Sun Microsystems, neither am I acting in concert with anyone who does. The article is intended as investigative journalism only and is in no way a solicitation to buy or sell securities or even a publicity campaign for certain securities. In other words, just read, blog and comment about it: that is all!Powered by Sidelines