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Technology Stocks : IBM
IBM 306.44-1.9%Nov 7 9:30 AM EST
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To: Kirk © who wrote (8003)7/17/2004 8:33:23 AM
From: Arrow Hd.   of 8218
 
Maybe someday the dividend will be back to where it was but when they had to cut the dividend and down-size in the early 90s it was a terrible period. It also cost a lot to borrow the money to pay the dividend while they procrastinated on what to do and hoped everything would recover. So there are a lot of wounds to heal.
IBM has survived a series of mistakes that would have killed other companies. They built an infrastructure in the late 80s to support a 100 billion dollar a year business and never got there. Wang, DEC, DG, the Bunch, and others faltered much worse but it was still very painfull to dismantle the expansion strategy.
The real pressure on dividends comes from what other tech companies do. If MSFT uses a lot of their billions in cash to issue a healthy quarterly dividend it will put pressure on IBM to do more. Otherwise, IBM will just up the dividend slightly once in a while to show progress.
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