Thread regarding IBM layoffs

Messed up priorities once again

International Business Machines Corporation (NYSE:IBM) will increase its dividend on the 10th of September to US$1.64. This will take the annual payment to 4.6% of the stock price, which is above what most companies in the industry pay.

https://finance.yahoo.com/news/international-business-machines-nyse-ibm-074240221.html

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Post ID: @OP+1c6Seone

7 replies (most recent on top)

@2non+1c6Seone, the interesting part is that even institutional investors can't be happy! The only reason that the dividend rate is so high is because IBM's Market Value has fallen so far taking its share price with it. Who cares about "Dividend Aristocrats" when the share price is a disaster?

Consider this:

If IBM's market value since 1999 had just kept pace with inflation (is that too much to ask after spending $176 billion on share buybacks?), the stock price at the end of 2020 would have been $335 dollars a share instead of $126 dollars a share.

The chart with the data on share price is below: (IBMers use common sense accessing my site! Be safe out there . . . do not put a target on your back.)

https://www.fordiscerningreaders.com/arvind-krishna-ibm-market-value-performance.html

It is good to almost have my new website above completely up and running.

Not much longer. A few weeks.

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Post ID: @2fra+1c6Seone

The dividend is nothing but a legal bribe to keep the institutional investors happy. Using cash in this manner is not a growth strategy. The stock price the last ten years is reflective of this approach. It has done nothing and will not until their is a change in Senior Management to change to culture and focus on growth vs being a cash cow.

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Post ID: @2non+1c6Seone

IBM is suffering from a lack of vision.

  1. 1980’s Akers rode the IBM monopoly of being all HW and SW things to all customers.
  2. 1990’s HW and SW cycles become commodities to Intel and Microsoft cycles so Gerstner comes in and changes the vision to “all things HW and SW for services to all customers”
  3. 2000’s Services become commodities to Tata, Wipro, infosys, etc etc and Sam tries moving up and down the services offerings ladder for vision. Consulting on the high end wins but has a limited market due to focus on the Fortune 500, and infrastructure on the low end (mostly IBM buying companies) fails miserably.
  4. 2010’s Consulting becomes a commodity (accenture, bain, McKinsey, etc etc) and Ginni decides her vision is to cast about for any new shiny object that may drive revenue. Wishful thinking is one he-l of a vision Ginni. It fails miserably and IBM loses 1/3 of its revenue and market share.
  5. 2020’s AK refocuses IBM on what they do well Enterprise and dumps the commodity offerings (GTS) He also realizes he has to have an Intel offering and adopts RedHat so he doesn’t have to compete with them, but instead license to them. Will it succeed? Time will tell, BUT so far his rate of change is way way way too slow, and he has failed to weed out his primary problem (established ineffective management). If he doesn’t pick up the pace, and swing the management ax soon it will be too late. Execution is by far his enemy right now and he is failing at it
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Post ID: @1ctj+1c6Seone

Financial engineering continues unstopped by BOD! They all need to GO! Even groups within IBM try to sc--w each other just to make their numbers. I have seen it with my own eyes. What a disgrace this company has become!!!!

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Post ID: @1soe+1c6Seone

IBM has been managed as a cash cow as it fails to grow. It is a strange direction for a tech company who's stated strategy is to be in forefront of hybrid-cloud growth. Typically, any left over cash would be reinvested to grow with the exploding customer demand - unless the management isn't confident of their ability to beat the competitors. But then again, this has been going on for over a decade.

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Post ID: @1yfn+1c6Seone

You're absolutely right about messed-up priorities. For decades, Senior Management has been breaching their fiduciary responsibility to the IBM Corporation by treating it as their own personal "piggy bank" ... which is a clear conflict of interest by not putting IBM's interests first. LG, SP, and GM have all walked away after extracting compensation in the mid-9 figures from IBM ... far more, even in inflation-adjusted dollars, than the Watsons or any other IBM CEO's. It now seems apparent that this "fiddling while Rome is burning" will continue under AK. 😢

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Post ID: @nzb+1c6Seone

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