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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: shoreco who wrote (80327)6/18/2002 9:45:17 AM
From: Earlie  Read Replies (2) of 99280
 
Shoreco:

IBM is (and has for some time been) my number one short pick.

Notice that the downgrade note doesn't reference the huge debt that IBM is carting. The profits implosion that IBM is experiencing makes servicing the staggering debt it carries increasingly difficult. The first of several casualties of this fact will be the stock buy-back program (which will NOT be announced, it will just quietly die). And then comes the interesting period when debt servicing becomes the foremost concern of management.

I expect to see IBM's stock priced in the mid Forties by the end of the fall and approaching the mid twenties by the spring as the company's problems (which aside from the above, include accounting misbehavior, rising pension fund liabilities and questionable service contract accrual methods), become more widely recognized.

Best, Earlie

Best, Earlie.
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