Moments ago IBM reported revenues and EPS that both beat expectations and yet the stock is sliding after hours. We may have an idea why, and it has to do with the scariest chart in IBM's history, which we first revealed three months ago and which just got scarier.
It's not this chart of IBM's ninth consecutive decline in revenues, which was scary enough in its own right:
Nor this chart showing the ridiculous amounts of money IBM has spent each quarter on artificially boosting its EPS through stock buybacks, reducing the total number of Big Blue shares to below 1 billion for the first time in years:
Or this chart showing that every dollar of debt IBM has raised since 2012 has gone toward buying back stock and then some:
Nor even this chart showing that the Net Debt of IBM has risen by a ludicrous 55% in the past year to a record $36.8 billion (but... but... record cash on the sidelines)...
It is this chart, indicating that as of Q2, IBM had a higher total debt/equity ratio than just after the Lehman collapse and, after last quarater's already record high ratio.
One of these days even the criminally corrupt and always amusing chimps at S&P and Moody's will finally have to notice what is going on here.