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Technology Stocks : IBM
IBM 308.58+1.8%Nov 28 9:30 AM EST
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To: Robert Scott Diver who wrote (6985)11/14/2000 4:07:09 AM
From: J. P.  Read Replies (2) of 8218
 
IBM has a solid plan. They issue debt (they're known as one of the best timers for issuing debt at rates favorable to themselves). Then they use that money from the debt issuance to buy back their stock (good timers there also). They reduce the float and boost their EPS and are able to see returns on capital for their debt issuance that are fantastic due to the self fulfilling rise in the price of the stock they bought back.

I'm sure this "business plan" has it's critics but it is a great way for a company, which is already operating off a huge base, to incrementally increase their EPS by leveraging the debt and equity markets. It would be difficult for any company as large and diverse as Big Blue to increase bottom line in the double digits any other way.
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