Thread regarding IBM layoffs

Kyndryl on its own

Today Kyndryl is on its own. There is good news and bad news with the spin-off.

The good
They took 88,449 employees with 10 year plus average of skills. (the more experienced and higher pay employees).
They absorbed slightly over 1 billion of IBM debt
They will not pay a dividend immediately (this allows them to invest in themselves)
They are 2x the size of their closest competitor
They are structured very similarly vs their competitors (8% of the workforce in NA, and the bulk of the workforce in low cost off shore locations)

The bad
They project zero to negative revenue growth thru 2024
To meet revenue growth targets they must double their automation
The bulk of their revenue is still tied to IBM relationships

by Anonymous
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Post ID: @OP+1dEMoxz3
Comment! It's anonymous!

5 replies (most recent on top)

I expect Kyndryl stock to be under pressure for at least 2 years. Remember IBM owns 20% which they have said they will dump over the next 12 months. Let’s see

  1. 20% excessive sell hanging over the market
  2. Declining revenue stream (5-7% per year)
  3. Declining margins in a commodity labor market
  4. Flat to declining profits

Yep it’s a buy

by Anonymous
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Post ID: @5whw+1dEMoxz3

.... and down 2% in first day of trading while the rest of the market is up or pretty much flat.

by Anonymous
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Post ID: @ube+1dEMoxz3

Kyndryl issues 1.8 Billion of debt and 500 Million revolving credit a few weeks ago. Untied to IBM. The 19.9% of Kyndryl sill owned by IBM is a bit of a problem for both.

by Anonymous
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Post ID: @cvw+1dEMoxz3

It looks like Kyndryl took a little over 2 billion of IBM’s liabilities. Loans, equipment, and notes. IBM actually left Kyndryl in a fairly good financial position considering

Cash
$2,013
Debt:
Revolving credit facility (undrawn)

Term loan due 2024
$500

  1. 05% notes due 2026

700

  1. 70% notes due 2028

500

  1. 15% notes due 2031

650

  1. 10% notes due 2041

550
Capital leases and other
337
$3,237
Net debt
$1,224
Net leverage1

  1. 4x
    1 Net debt divided by 2020 adjusted EBITDA
by Anonymous
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Post ID: @rss+1dEMoxz3

How much debt they transferred to Kyndryl? Companies tend to create subsidiaries like that and then pull the plug and let them go BK.

by Anonymous
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Post ID: @fmh+1dEMoxz3

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