IBM Message Board - Msg: 17560230

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : IBM

IBM 309.27

+0.9%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: art slott who wrote (7674)	6/5/2002 12:51:04 PM
From: Arrow Hd.	Read Replies (1) of 8218

Looks like this will be free cash flow after this quarter's write-offs are taken but I don't see anything to cheer about. I consider the DASD business to be a core hardware sector and to just sell it off with the people, intellectual property, hard assets, etc. seems to me to be a level of capitulation that is a profound statement of mismanagement and why trying to gain market-share through price attrition (buying customers) just does not work long term. A lot of cross-pollination existed between technology groups (internal drives, processor controllers, etc.) which disappears now (or you pay Hitachi). I would not be surprised if IBM keeps a core competency group of developers and gets back into this business at least from an internal standpoint. Similar maybe to what happened in printers after selling off Lexmark. But it is a draconian move no matter how you cut it. I believe the strategy is to down-size the business and reset the revenue bar from which the remaining businesses can easily provide both revenue growth and margin expansion. Wall Street will have forgotten from where it had dropped and will be happy with this improved revenue growth. Afterall, they have already forgotten Gerstner's preaching about IBM means GAAP earnings and this quarter are focused on Pro-Forma earnings "to see how IBM really did". How they really did will be reflected in the GAAP numbers just like Lou always preached. After writing down the storage business even with 2 billion coming back in they basically gave this business away. Not a pretty story.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next