IBM board gives Big Sam another $5bn
IBM's stock repurchasing addiction to show earnings per share growth continues unabated, and today the company's board of directors gave the company's management another $5bn bag of junk to take to Wall Street to buy back its own shares in the coming year. The news came as IBM was paying out its quarterly dividend of 55 cents …
....we have to prop up Fat Sam's share options. And screw the defined benefits pensioners who built this empire.
"IBM has not had a stock split since May 1999, and there is little question that the company would really like do to one again"
Why would they buy back shares to drive up the EPS and then do a stock split? Wouldn't that dilute the EPS all over again?
If you buy back stock from the open market you reduce the number of shares available to investors, right?
This makes the price of your shares rise.
But if there are less shares on the market, don´t you have to pay less dividends, do you?
If all of the above is true, wont a long term buy-back strategy reduce the amount of dividends to pay and thus save you (at least some) money?
Pirates, because of stock markets
And not forgetting managing out those none Final Salary Pension employees who have dedicated their lives to the company. Performance ratings have been rejigged to manage a certain percentage of the employees out on an annual basis (i.e. to avoid redundancy payments)
http://www.endicottalliance.org/jrm2006hrwebcast_030206.pdf (slide 7)
Still, I can't think of anything better to do with $5bn than give it to Palmisano & Moffatt etc. I'll quite happily worry about my mortgage an kids knowing that Sam and Brendon Riley's families are OK.
A truly reprehensible company to work for these days.
I can see how reading two sentences could be challenging.
"IBM has not had a stock split since May 1999, and there is little question that the company would really like do to one again. "
was followed immediately by
"There has been a strong psychological tendency in the market in recent decades to push IBM's stock up to $100 a share"
As someone who had some stock before 1999, I would like it to split and head back towards $100 again....
The higher eschelon carry on with 'sluttish abandon' artificially pumping up the value of the company. Whilst at the bottom end - the tech's and customer facing 'grunts' - are gradually being 'dumbed down' due to lack of education, and skills development(even in IBMs own product set) that has been broadly denied for the better part of 8 yrs. Also moving support jobs to lower cost centres(India, Eastern Europe), where skills are at an even lower level. This is being done for two reasons 1. immediate cost savings 2. forcing customers towards 'self-sufficiency' - whilst still charging a premium for support.
Managing out staff, is planned to include staff rated as PBC2 - this is the rating which staff attain by meeting their contractual requirements. So by meeting the levels as defined by IBM they intend to 'manage out'/separate
IBM, whose Business Conduct Guidelines preach 'ethical business practices' throughout as a 'must do' mantra, are behaving in an utterly unethical manner
Timothy-
Care to back up your statement that IBM walked away from the Sun deal because it couldn't afford it?
Seems to me that a company that exited the 4th quarter 2008 with more than 16bn in cash could afford to do pretty much whatever it wanted...
