By every standard, Rometty has not delivered for IBM shareholders, and yet she remains CEO.
https://investorplace.com/2020/01/the-activists-should-jump-all-over-ibm-stock/
6 replies (most recent on top)
They did what they did, because someone was acquiring IBM stock. Go back and look at the pre-announcement volumes. Someone was pushing the stock. That happens when someone is pushing the stock either way. Perhaps someone knew the announcement was coming, BUT if it was an activist investor, Krishna has a very short runway (end of March) to start replacing the board and making things happen. Good luck all IBM’ers as the next 90 days are going to be especially turbulent (if Ginni’s statement about a 1 year search for the next CEO is true) (the one year statement means IBM already has a plan they are executing) and 2020 will be game changing. My prediction is IBM exits 2020 approx 20-25% smaller, but with a much better balance sheet and profit mix NOTE amazon’s cloud business shrunk to mid 30’s growth rate. YES far bigger than IBM’s, but shrinking at quite a pace. Most cloud providers will settle into a Slowing NICHE market place as time moves on. IBM’s play is enterprise (mainframe/Power), which is a smaller NICHE, but a far more profitable one
And she is out! Finally!
https://apple.news/ACCavORbnTSGF6dlBPdmlpw
This company's management has one goal. Not good products, not customer service, not "excellence". The company's one goal is dividends to make its top investors happy. These are the people on the BOD and they keep Rometty because she gives them what they want. Literally hundreds of thousands of employees suffer just so these few rich people can get richer. Of course the company is dying, but these sociopaths are betting it will outlive them. Employees must decide if they would make the same bet. If not, get out now.
It's a bloody disgrace. Rometty should have being kicked out a long time ago.
IBM is ripe for an activist investor to make a play here. (strong legacy cash flow, high overhead that can easily be cut, and a 90% institutionally held stock). Get 3% of the moveable shares like Icahn did at HPE/Xerox and you are in business. The institutional investors like the big dividend, BUT a value play will trump dividend every time.
“So far, however, it doesn’t seem like activists have the appetite for fixing what ails Big Blue.“
^ This. Keep dreaming that an activist investor is just around the corner. Not happening.