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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: pater tenebrarum who wrote (44588)12/6/2000 6:14:50 PM
From: Cynic 2005  Read Replies (4) of 436258
 
H and all,

I just want to follow-up with our good friend Earlie's analysis on IBM. I believe that it is finally time that the accounting gimmicks will catchup with the company! In addition to all the points Earlie has mentioned, there are three important developments during this quarter.

1. It looks like they have retorted to a cash conservation strategy during the quarter. Exhibit A - they either cut year-end bonuses or eliminated the bonus for some groups completely! Why do you think it is?

2. The last I checked, their debt is trading at around 85 cents on the dollar. Not a terrible level, but if I remember correctly, this is how Xerox troubles started.

3. They tried to rise prices of mainframes from Dec 1. Besides, they gave added incentives for the orders placed before Dec 1. From what I read (sorry I can't locate the link), this strategy produced a double whammy to their top-line (and it will to the bottom-line). First, there was only a slight uptick in the order rate before Dec 1. Second, virtually the orderflow stopped after Dec 1.

Jan 70s or Jan 75s may be worth a shot - only with risk money! I know that IBM, under Louie the lip never warned but threw the bomb(s) directly at the crowd. This time it will be different, IMO. I am almost positive that they will warn before the year is out.

IDKJS about equity analysis, much less business analysis of a big company like IBM. Caveat, emptor
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