IBM stock will soon be trading under $100. What a bunch of awful CEO’s they’ve had in the past 15 years. This company used to trade in the mid $200 range. Someone needs to tell current management they are fired.
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When I first hired on to IBM in 1968, shares were around $600. Even with the 10% employee discount it took almost the whole year of payroll deductions to purchase a single share! Now I can't imagine why anyone would want to buy IBM at any price! Good luck to current IBM'ers - You're going to need it!
PS Keep my pension checks coming in!
So all the workers get ra’d but the instigators of the turmoil get paid handsomely
... you can't have continuous growth on a finite planet.
Some companies grow while other companies shrink. IBM has been on the shrinking side of the equation for several years now and this will likely continue and perhaps even accelerate.
Just a thought/question for those more knowledgeable than myself...
If the only thing Wall Street wants to reward is continuous growth... what are companies in mature markets supposed to do?
As one person said... you can't have continuous growth on a finite planet.
Seems that at some point one hits limits. Either in inputs, or places to sell too, and thus growth cannot continue indefinitely. Perhaps the whole economic model is in need of some sort of revamp? Though I can't say what that revamp should be, other than to think... "sustainability".
That said, IBM (and Newco) are both large companies with large customer bases. Somehow I don't think they will just evaporate.
I know this feels like piling on, BUT this article hits the nail right on the head. IBM you are out of credit, and short on cash given current course and speed. AK knows this, and has made GTS the scape goat. This plan has Bain’s handiwork all over it Offload the debt to GTS, then claim to be shocked when they can’t service it. It’s not an IBM default, but rather an IBM default by proxy thus allowing IBM to have access to their credit lines. Nice work if you can get it
https://seekingalpha.com/article/4382129-ibm-aggressive-promises-shares-remain-unattractive
IBM has at most 18 months to get off the financial engineering train (eliminate the dividend, permanently end buybacks, stop managing to a quarterly EPS roadmap) and climb aboard the invest to generate continued revenue growth train or it will be too late and there will be no turning back. Unlikely though, 59% of shares held by institutions, over 21% held by just 3 of them, and they want their dividends. AK is in a no win situation.
You guys are missing the big picture with the spinoff of GTS. It’s not that GTS is for sale, BUT rather a slimmed down IBM is for sale. IBM’s free cash flow even at this point in time (Covid, and quite high debt) is still a desirable target. Remember GTS has to absorb all of the bad news that IBM chooses to dump on it.
The IBM lemon has been squeezed and squeezed for dividend juice and will soon be dry. Once the investors give up on it there will nothing left but a husk.
IBM may finally be past the tipping point ... there are several things not going in IBM's favor and they are intertwined so that their effects will amplify each other.
- Competition is faster, better, cheaper.
- Earnings and profits will decline to the point where the dividend must be cut. IBM will of course wait to do this until it is too late, just like they waited until they were past the point of no return to pull the plug on buybacks.
- Effects of Covid19 on the global economy are not going to end anytime soon. IT business is booming in the consumer (laptops, tablets, home office supplies) and cloud (Amazon Microsoft Google) and IBM is mostly left out of this. Mainframe now in downturn part of cycle.
- Investors who see short-term risks for stock price eating any dividends will dump IBM.
- Investors who see long-term risks to dividend will dump IBM.
- IBM has far too much debt to manage for a business in decline.
- IBM turnaround is not well defined and will take too long for impatient investors - the money will exit IBM and go to less murky stocks.
After decades of slow decline, the final downward spiral could happen very quickly.
50 bucks a share. Don't be surprised
Sub $100 coming very soon to a broker near you!