Well I am no genius but stocks look like they will dive tomorrow at the opening. If so I would think you could get a good deal on those calls.
Did anybody notice the 2 Billion dollar software sale that was just announced. If IBM stock drops tomorrow its throwing the baby out with the bath water. 2 Billion is nothing to snease at.
f the economy stays strong 98 will be a good year for IBM. Gerstner will insure this. He will as others have said just lay off as many workers as necessary to get the bottom line.
With all that said. Guess what I work at IBM. There recent cuts in my opinion were pathetic as they probably are at any large corporation. We let some skilled people go and believe me there is tons of "fat" left.
If one looks into where IBM makes there money it shouldn't shock people to realize that IBM doesn't sell much hardware anymores. Its a software , services, etc... organization. Not to mention the old credit union raked in a few bucks. Haardware sales have been absent the last few quarters. Guess what expect decent hardware sales this quarter.
Do what one wants but IBM is headed up not down.
By the way the GTW rumour I have never heard. I plan on making some calls tomorrow. Thing I wouldn't understand is why IBM would want GTW. Maybe we shall soon find out why
I don't have any "news or inside info" on whether IBM is trying to acquire GTW. but here are some key pros and cons of a potential merger: Pros: 1. IBM diminishing presence in the consumer PC business, GTW was rated # 1 in customer sat, also IBM product is viewed a s more expensive (is) and service/support is slow. 2. GTW is making major inroads into corporate accounts after Dell model. IBM strategy revolves around dealers/channels, this merger would give IBM a new growing distribution channel (direct) to compete with Dell &Compaq.
3. GTW manufacturing/selling costs are low, IBM for years tried to lower their PC cost infrastructure, instead of trying to create a new model, let's just use one of the most successful ones 4. GTW cost structure is being pressured from their 3 and 9 month income statements, they can leverage IBM manufacturing capacity/size to improve pricing and deliver newer/more buisness PC products. 5. If IBM wants to enter consumer electronics business for future mobile/media type products, GTW is again a great Co. for that, their PC/TV won recent top awards and IBM for years havn't been successful in creating their own consumer division (existing one has mixed results) 6. Gersner strategy has been for the last three years to acquire companies that he cannot create internally in IBM (just look at Lotus and Tivoli)
7. The trend in the PC industry is consolidation to fewer major players, GTW will have a difficult time surviving on it's own long term
1. IBM will have to merge two differnt cultures (howeverr they have been successful at that with Lotus & tivoli.. theny leave them alone and allow existing Mgmt to lead)
2. IBM will have to carefully manage a direct PC channel and their strong existing dealer distribution channels, since GTw competes with dealers today. This is challenging but doable
3. I haven't had a chance to analyze GTW to great detail to see key reasons for their slower/negative profits, thier sales are growing and assuming no major issues, GTW could provide IBM with the PC growth that it needs desperately
4. IBM & GTW have to see the level of product overlap they have to decide what needs to go if they merge.
I would be intersted in feedback on the above analysis.... maybe it's time to buy GTW 35 Jan options for $ 1/2 ????