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"Back in July, we highlighted comments from hedge fund manager Stanley Druckenmiller, who called IBM the "poster child" for what was wrong with modern corporate behavior.
Druckenmiller said IBM's financial-engineering practices, which include tripling its debt to repurchase stock, were exactly what had been wrong with the economic recovery."
"In Druckenmiller's comments back in July, he said that despite a stock price that had, to that point, risen more than 50% since the 2008 stock market bottom, IBM's sales were identical to what they were six years ago. "
In your thread regarding the chip unit that IBM paid someone else to take, I remembered that they produced the PowerPC chips which were the ones used in Apple's devices. Apple made the switch to Intel and that must have been a big blow to that line.
It seems like bad business to me if you have to pay someone to take part of your operations away. It was an ugly duck so to speak.
In your thread regarding the chip unit that IBM paid someone else to take, I remembered that they produced the PowerPC chips which were the ones used in Apple's devices. Apple made the switch to Intel and that must have been a big blow to that line.
It seems like bad business to me if you have to pay someone to take part of your operations away. It was an ugly duck so to speak.
Good morning.
True what you noted about IBM. I guess I just think that once this period ends, it will quickly become very clear which companies used this period of easy money in order to strengthen the company smartly and which didn't. This whole idea of financial engineering - buying back a boatload of shares while the underlying company is stagnant at best - eventually stops working, then you're stuck with a stagnant company who has tripled its debt.
I've had a similar view on Sears for a few years. SHLD, IBM, MCD, KO, all in decline.
Comments
"Back in July, we highlighted comments from hedge fund manager Stanley Druckenmiller, who called IBM the "poster child" for what was wrong with modern corporate behavior.
Druckenmiller said IBM's financial-engineering practices, which include tripling its debt to repurchase stock, were exactly what had been wrong with the economic recovery."
"In Druckenmiller's comments back in July, he said that despite a stock price that had, to that point, risen more than 50% since the 2008 stock market bottom, IBM's sales were identical to what they were six years ago. "
In your thread regarding the chip unit that IBM paid someone else to take, I remembered that they produced the PowerPC chips which were the ones used in Apple's devices. Apple made the switch to Intel and that must have been a big blow to that line.
It seems like bad business to me if you have to pay someone to take part of your operations away. It was an ugly duck so to speak.
True what you noted about IBM. I guess I just think that once this period ends, it will quickly become very clear which companies used this period of easy money in order to strengthen the company smartly and which didn't. This whole idea of financial engineering - buying back a boatload of shares while the underlying company is stagnant at best - eventually stops working, then you're stuck with a stagnant company who has tripled its debt.
I've had a similar view on Sears for a few years. SHLD, IBM, MCD, KO, all in decline.