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McNealy dismisses Sun buyout rumor

Sun's CEO says BusinessWeek report that he may be taking the company private is "unsubstantiated."

Stephen Shankland Former Principal Writer
Stephen Shankland worked at CNET from 1998 to 2024 and wrote about processors, digital photography, AI, quantum computing, computer science, materials science, supercomputers, drones, browsers, 3D printing, USB, and new computing technology in general. He has a soft spot in his heart for standards groups and I/O interfaces. His first big scoop was about radioactive cat poop.
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Stephen Shankland
Sun Microsystems CEO Scott McNealy is disparaging a report that suggests an investment firm is planning a leveraged buyout of the server and software company.

McNealy called the report a "totally unsubstantiated rumor" and part of a scheme to profit from a stock price boost.

BusinessWeek on Friday quoted an unnamed hedge fund manager as saying McNealy is considering taking Sun private with the aid of Silver Lake Partners, an investment firm that bought out Seagate Technology and eventually relaunched it as a publicly traded company. According to the BusinessWeek report, the manager foresees a price of $5 to $5.50 per share, well above $3.44 the stock closed at Thursday.

In an e-mail Friday, McNealy said the rumor is part of scheme to profit from an increase in Sun's stock price, which had risen 36 cents, or 11 percent, at 8 a.m. Pacific. The stock had traded higher earlier Friday.

"Why would a supposedly credible rag like BusinessWeek quote an anonymous hedge fund guy on a totally unsubstantiated rumor designed to spike the stock price?" McNealy said. "I will bet this hedge guy is laughing his butt off that BusinessWeek printed this as he profits from the $0.42 rise in the price this morning."

Sun has stopped the deep revenue declines that plagued it for years after its fall from dot-com glory, but the Santa Clara, Calif.-based company still is suffering from mostly flat revenue and breakeven profitability.