Sun Microsystems (JAVA) Hit
May
2
Written by:
5/2/2008 3:44 PM
Sun Microsystems (JAVA) Hit
Sun Microsystems last night after the close reported a third quarter loss that stunned Wall Street analyst who had been looking for an 18 cent profit. The company reported losing 4 cents a share compared to making 8 cents a share a year earlier. A very good example of the need to be cautious with your positions at a companies earnings announcement.
The US economy is not a place to rely upon in these days as Sun blamed weak domestic sales in addition to the $1 billon purchase of MySQL, an open source database system. The acquisition cost the company 4 cents a share in the reported quarter. Revenue came in light also at $3.27 billion vs. an expected $3.38 billion.
Put options in the month of May looked very attractive today across the board as JAVA stock lost over 21% of it’s value. Strike prices of 13, 14, 15, and 16 all had above average volume in the front month indicating additional downward pressure on the stock to come.