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Barclays buys into Sun stock

Barclays Global Investors becomes a 3.18 percent stakeholder in the struggling company, just as Sun loses Marten Mickos, the longtime CEO of MySQL.

Update at 9:03 a.m. PST: Comments from Sun added.

Barclays Global Investors has signed aboard as a new shareholder in Sun Microsystems, taking a 3.18 percent stake in the struggling hardware maker, according to a U.S. Securities and Exchange Commission filing Thursday.

Sun, whose stock closed up 10.3 percent on Thursday, at $5.48, after heavy trading volume of 21.6 million shares, has seen its stock on the rise since January 30, when it traded at $4.16 a share.

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On the day before Sun's shares started their northward trek, the company's largest shareholder, Southeastern Asset Management, announced in an SEC filing that it was increasing its stake to 22.3 percent from 21.5 percent.

Also on that day, Sun named Rahul Merchant as a new director to its board, as part of an agreement with Southeastern, a large institutional investor.

Southeastern, which in October changed its status from passive investor to activist shareholder, is adding two new directors to Sun's board as part of that agreement. Merchant is the first of the two.

Merchant, a former chief information officer of Fannie Mae and former chief technology officer of Merrill Lynch, has more than 25 years of technology and operational management experience, according to Sun.

Although he comes with an extensive background in tech, executive recruiters say it's unlikely that he was selected to eventually replace Sun CEO Jonathan Schwartz, given that Merchant does not have any prior CEO experience. Rather, they note, he will provide strong technology insight for Sun's product road map.

Sun spokeswoman Karen Kahn noted that she had not heard of any discussions regarding Merchant as a Sun CEO and that the company would not comment on such speculation.

She noted that Southeastern submitted Merchant's name as a potential director and that he was already on Sun's radar, given that he has worked for companies that are Sun's customers. Both Sun and Southeastern are working on finding a second director, but there is no deadline for that to happen, Kahn said.

Last week, Sun reported fiscal second-quarter results that, despite beating Wall Street's expectations, included an 11 percent revenue drop and a loss of $209 million.

The company announced a major restructuring in November, and industry watchers say that may be its only hope, since it's unlikely the company will attract any buyers.

On Friday, longtime MySQL leader Marten Mickos announced that he is leaving Sun. Mickos follows MySQL co-founder Monty Widenius in announcing his resignation from the company.

Southeastern, meanwhile, is looking to use the flexibility it achieved with its changed status as an activist shareholder to hold discussions with Sun's management, as well as third parties, about opportunities to maximize the value of the company for all shareholders. And now Barclays Global is part of that group.

Barclays and Southeastern were not immediately available for comment.