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To: reaper who wrote (207916)12/4/2002 10:48:28 PM
From: Cynic 2005  Read Replies (2) of 436258
 
Reaper,

Your analysis makes perfect sense. IBM is also winking at (may be begging) the "markets" to safeguard their stock price at these levels. I am thinking that this announcement may in fact be the death knell for the stock that we are waiting for.

1. First, they are now selling stock - about three weeks after they said they were buying in mid 50s.

2. Now a blatantly obvious maneuver to make sure pension fund liabilities won't hurt earnings. Notice that they are doing this with "stock" - not cash. For now, let us assume that they are preserving cash for other 'good' reasons, such as stock buy backs (-g-)

3. Indication that they will not buy the stock in the near future is a clear signal that they have some cash crunch now or on the horizon. If I remember correctly, the PWC deal was not a cash deal (was it?) now, my question is where did all that "free cash flow" of $21 bil go? Can anybody give me a convincing answer to this question?

Bottom line, there ain't gonna be any cash to buy stock in the near future. Given this, would you buy IBM stock, even if you are 'managing' OPM? I bet most fund managers would be leery of the possible bottom fallout. The stock may get a boost tomorrow. But the I think that selling will pickup on Friday and accelerate from next week.
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