Everyone with brains knew that the financial engineering and labor arbitrage model would eventually blow up in IBMs face.
IBM may have run out of options in those areas.
Now what does IBM do?
Due to lack of revenue/cash flow It can no longer afford to buyback stock at the current levels, something which propped up the stock price and since 2004 it has eviscerated its U.S workforce and reallocated most of it it to low cost resource areas.
Now what does it do?
Both are blue chip and well respected but seems to me that Apple more represents US industry than IBM, and has for a while. Now that Apple has split, I wonder if it is a DOW candidate.
It's not Rometty that is the problem.
While he was CEO Sam P created the problem and the IBM BOD signed off on it.
Pay nothing until February 1st.
Well lets see....
Having a business model consisting mostly of labor arbitrage and financial engineering has now blown up in IBMs face and the street has finally come to the conclusion that the big blue emperor has no clothes .
Leveraged the company with debt to fund a level buybacks that IBM can no longer afford.
For labor arbitrage, defacto engaged in age discrimination by the acts of RA'ing/offshoring massive numbers of over age 40 IBM U.S employees jobs to low cost off shore locations, age discrimination by hiring under the age of 40 resource replacements for those RAd over age 40 IBM U.S employees.
As part of the IBM destroy the IBM employee knowledge relational networks program, a program that consists of lay-ing off on a regular basis anyone with enough experience at IBM to be able to answer a question about how to do anything at IBM without trying to find the answer for hours somewhere in a Lotus Notes database , raided the 401k monthly company matching program by institution of a end of year company matching contribution process so that the company can avoid paying out matching 401k company contributions to anyone IBM RAs. prior to the end of the year.
Recently instituted a program of no compensation for employees training.
Due to a several years lack of organic growth and revenue generation, big labor arbitrage and financial engineering blue is now running out of cash to maintain buybacks at current levels
Now what is next for big labor arbitrage and financial engineering blue I wonder?
Like has been pointed out for years by anyone that has any brains, IBMs major success for many years has been mostly in Financial Engineering and labor arbitrage areas.
The former emperor, has no clothes and the writing is on the wall.
I need help - i do not knw much about IBM nor the stock market. I just inherited IBM stocks. To see the value drop from 190 to 165 is shocking, Should i just sell them?
We need a real CEO running this company. seeing the CEO yesterday, I thought she was going to cry. Time to get over this Political correctness and bring in a guy who knows what he's doing.
Is there really a causal relationship, or is this more of the "Glass Cliff" paradigm?
why shouldn't she be fired. in 2 years she has taken the stock from 220 to 160 and it may go lower. she was never any good. another PC move gone very bad!
Board of IBM could have a "closed door" meeting less CEO Ginni Rometty
to discuss her "future" with IBM.
Prediction - she will be "relieved of duty" very soon.
Sentiment: Strong Sell
Just my opinion, but I do think this sell off is so overdone. I am a long term holder of IBM, in at $125. I do not plan on selling, that is what they want us to do so they can buy it lower. Good luck to all longs!