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International Business Machines Corporation Message Board

  • justbeingcareful justbeingcareful Dec 17, 2013 5:58 PM Flag

    A Complete Outsider's Balanced View

     

    Can anyone name a single product segment where IBM is the industry leader? Not servers, not databases, not supercomputers, not infrastructure software, not mobile wireless devices or infrastructure or operating environments, not cloud computing infrastructure or consulting, not social computing, and not even business analytics. Face it - the IBM era is over. Palmisano gutted the company and wrung out every last penny of profit before he retired. Now they have an aging, second rate executive team and massive business problems. Let's not forget that Public Sector is their largest sales segment and there is a worldwide collapse in government infrastructure spending. Externally they put on a pretty good show but internally it's all gut wrenching meetings and constant threats. Occasionally you see some of it shine through like the famous email prodding the sales force for "poor execution." It's entirely possible that they can engineer the numbers for a while longer but certainly not much longer. And the chance that they can find a qualified CEO willing to take on the mess is very small. Overall it's a stupid investment but also a bad shorting opportunity because they still have some financial surprises up their sleeves. Implied volatility on the options is too small to permit creating any meaningful hedged structures and there are no real opportunities in IBM single stock futures or IBM VIX. Only a complete idiot would lend them money by purchasing bonds at anything below junk bond yield levels. The only real trade is to short IBM long-term debt or to buy IBM VIX options with a far-dated expiration. Better yet - just watch it fall from the outside.

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    • " Not servers, not databases, not supercomputers, not infrastructure software, not mobile wireless devices or infrastructure or operating environments, not cloud computing infrastructure or consulting, not social computing, and not even business analytics. "
      Which IT/computer company IS the # 1 leader in at least two of those categories? You have to agree that IBM is involved in all of these businesses and some are losers but most are winners for IBM. Years ago when I worked for IBM, my division lost money but IBM's total business revenue and profit was legendary. I got transferred to a different division and that too lost money (not because of me-I was not that important to make an impact) but the stock went sky high based on the TOTAL revenue, of all the divisions.
      "They still have some financial surprises up their sleeves." TRUE, but doesn't that also add to the total bottom line? Give credit to those who can find legal loopholes in order to improve the profit margin. You might find that IBM is the leader in that category. Not bad for a computer company to also have world class leaders in financial manipulations, no?

    • @ iamgarce,
      Retired manager eh? You have no idea what's going on inside right now. Worker morale has never been lower. Worker morale and productivity are proportional. They follow the same vectors.
      I've tried to explain this fact to management at ibm several times using several graphical/mathematical methods. They just deny and tow the corporate line. "Oh, I don't agree with that analogy." That's their typical response when I tell them how it is out on the mfg floor, the QA Lab, etc.
      They make us bring in our own pot luck food for holiday parties. Cheap prks. That's a minor complaint compared with what I can unload here. I'm not trying to sway any investor, just trying to give some insight about the reality of the current state of affairs.

      • 1 Reply to kure88atoll
      • Worker morale has never been lower ... LOLOLOL ... and 40 years ago , it was the same .. by the
        very definition of worker .. one will not have terrific morale ... LIFE IS WHAT YOU MAKE OF IT ..
        NOTE ... there are hundreds of thousands in the US (including IBM'ers whose careers were cut short) whose morale would be sky high with a salary of 60K(or maybe 200K) and attendant benefits ..
        IBM rank and file have always complained , usually because they had nolife experiences before
        signing on with IBM ..
        ME ? former manager .. well, yes , for 5 years , but they didn't like me all that much in that position ..
        for 32 years , i worked along side of hundreds of people with low morale , yet i thought that i was
        on the que vive , even when i was just punching widgets on the mfg line ... g

    • Your balanced view overlooks that IBM isn't focused on "a single product where IBM is the industry leader."

      IBM is the leader in Global Business Services and Global Technology Services which ttm produced about $60 bil of revenue and about $10 bil of pretax profit.

    • fair enough ... now , did you know that IBM never made the best computers ?(until Watson, anyway) and you
      are probably right about the rest of your list ... IBM has always been about SERVICE ... not just computing
      service , but just service , top to bottom .. they also were not first on many things ...
      bottom line is that IBM has made obscene amounts of money over the past 100 or 110 years ... 'nuff said .

 
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