Tuesday, May 10, 2005

Hit #44

Sun today announced that it is buying Tarantella (TTLA) for $25 million, valuing Tarantella shares at 90 cents.

I had bought Tarantella in my speculative bucket a few months ago at $1.61/share. So this represents a loss of 44%! Yes, a bad hit.

Tarantella is the stripped down version of the former SCO. Why would management sell at this price, when the shares were trading much higher just a few weeks ago ? With a decent list of enterprise customers and a steady revenue base, what was the hurry ? We will never know. Yet another deal where a court appraisal may help. If only the Delaware courts were more shareholder-friendly.

Looking at the other side of this transaction, Sun got a good deal, buying some valuable technology assets for a song (though it may sound more like a dirge on the other side).

This sector, of remote access / computing, still remains attractive. Other players, including Neoware (NWRE) and Citrix (CTXS), are targets too. Both Neoware and Citrix are still expensive.

I own a few shares of Citrix bought at a much lower price.


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