Sun hopes perception is reality

September 7, 2007, 12:39 AM UTC
Fortune

A technology generation ago Sun Microsystems (JAVA) extremely successfully convinced investors that it put the “dot into dot-com.” It was a brilliant marketing campaign. The product hadn’t changed, just the perception of it. (Ed Zander, whose best effort at Motorola (MOT) has been embracing the pre-existing and relatively empty “seamless mobility” label, likes to take credit for the marketing move at Sun, where he was the president.)

Now Sun is playing the perception game again. It will do a reverse 1-for-4 stock split in an effort to convince investors it is not a loser company. Executives acknowledged that reverse splits are meaningless from a valuation perspective. (Ditto for regular splits, by the way.) In fact, a reverse split usually is a sign of desperation. But Sun says it can stop the questions about the company’s staying power if essentially ignorant customers stop seeing a sub-$10 stock price.

Last week Sun also dropped its long-time stock symbol, SUNW, in favor of JAVA, which is the name of pioneering software Sun developed. (Google (GOOG) CEO Eric Schmidt played a key role on Java.) “More than a billion people across the globe, representing nearly every demographic, market and industry, rely upon Java’s security, innovation and value to connect them with opportunity,” CEO Jonathan Schwartz said in a statement. “That awareness positions Sun, and now our investor base, for the future.”

Whatever you call it, the stock was up 11 cents, or 2%, Thursday, to $5.48. Yawn.