In a highly unusual and particularly scathing letter to Sun Microsystems’ Board and CEO Scott McNealy, influential Merrill Lynch computer hardware analysts Scott Milunovich today warned Sun it may be setting soon, and may face a takeover, unless they undergo drastic change.
The anaysts exhorts Sun to cut 5,000 to 7,000 jobs and discontinue its Sparc, Mad Hatter, and Java product lines.
Sun has been having a really bad week already, losing 14 percent of its stock price on Tuesday after it warned it wouldn’t meet estimates and would restate some $1 billion in previous results. Following the letter, Sun is off another 2 percent in late-afternoon trading.
The question: Is this new method of publically berating a company’s leadership the kick in the pants many large, unwieldy corporations need today, or is this a case of an influential analyst overstepping his bounds, and nearly blackmailing a company by affecting its stock price, to do what he thinks is right?