This page has been archived and commenting is disabled.
Is This The Scariest Chart In IBM's History?
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.
»
- 66109 reads
- Printer-friendly version
- Send to friend
- advertisements -
HAL
Yawn... this analysis can be applied to other DJIA companies.
When do we fight? When does the revolution begin so we can hit the reset button?
P R O J E C T M A Y H E M ! ! !
Ludicrous speed
Equity = ownership
Debt = owing "money"
So if I can convert "Debt" into "Equity", when would I want to do that?
A: When I knew that the denomination of the "debt" was about to be made meaningless, but the "ownership" would remain, even after the currency explosion.
Suspenseful articol...
Obama already investigated Standard & Poor's for the U.S. downgrade...to encourage the others.
Who's gonna downgrade too big to fail cronyist companies now?
yeah, Sean Eagan got bit before Standard. Eagan Jones appeared to me a step ahead of most folks, but maybe because they were paid by end users and not the issuers.
Follow the money.
It is some scarey stuff, shit that legends are made from, good and bad.
We live on the razor's edge, led by malintents and incompitence!
During his rein from 1956 to 1971, Thomas Watson, Jr. grew revenue more than 9-folds and number employess almost 4-folds.
Today, I doubted even him cares about Big Blue.
Gone were the days of the exceptional American entrepreneurships.
He didn't build that....
It was a burecracy in 1979 on the scale and with the effeciency of the US Army. It's just a dying dinosaur; a left over from a previous business climate.
Clever. And realistic. Life imprisonment for everyone? Pounds of flesh? I think you're right on the money. Takes balls though.
Michael Milken and Bernie Madoff look like altar boys compared to the regular, repeated, daily theft now taking place on Wall Street. There simply are not enough lamp posts when this all unravels....
I just came up with lamp post extensions that allow to hang more bankers per post. Who said american entrepreneurship is dead ? You just have to be where the demand is / will be.
Ownerhsip of what? It's a buggy-whip company; it's just another Blockbuster. It's so over; it's ridiculous. they're out of it, behind the curve, lost in the undergrowth; clueless and dying. Another digital dinosaur.
Very good. One of the best comments I have seen. Nice to see critical thinking at work.
Very good. One of the best comments I have seen. Nice to see critical thinking at work.
IBM's doom was sealed when the financial engineers took over from the computer engineers.
Yes and as goes IBM so the Market, and probably the country.
"IBM's doom was sealed when the financial engineers took over from the computer engineers."
It's an oxymoron to put both the Financial and Engineer into one single term. It can't be.
the things you own end up owning YOU!
In USSA, money puts YOU in bonds!
this results from fed zirp, there is no need to spend cash on capex., robots and part timers will replace most full time employees except for the 500 million $ CEO.
You may want to read this expose on IBM and its future by this guy. Frightening stuff for IBM if true.
http://www.cringely.com/2014/06/04/decline-fall-ibm/
Here's another interesting tidbit....
http://geldred.com/2013/04/29/cringely-the-decline-and-fall-of-ibm/
Since everyone is white-boxing their internal servers and cloud infrastructures.....IBM is down to peddling Watson (the cognitive supercomputer that won at Jeopardy) as a service.
Watson is a supercomputer, but cognitive? It cannot think. Narrow expert system that won one Jeopardy! match...IBM is down to peddling Watson as a barbeque sauce recipe builder.
IBM should abandon traditional business and focus on collecting information for CIA/NSA/FBI. It seemed to work out for Facebook and Google.
I'm thinking they just need to re-open the W.O.P.R. line...think we're gonna be better off with computers making the decisions than the neocon assclowns are now. Do you want to play a game?
No...
B U F
as !n Buffet
what does IBM even do now a days anyways to make money? the cloud? consulting?
IBM owns the full stack. HW/OS/DB/App layers. This is kind of the reason Oracle bought Sun. So they can compete with a full stack. Hardware, OS, DB, App. Oracle was missing the hardware/OS so Sun was probably an ok buy for them except it killed Sun which sucked.
Lots of PHB's out there who want one throat to choke.
|what does IBM even do now a days anyways to make money?
same as Intel making shit up...
They charge their poor mainframe customers by the MIPS (Millions of Instructions Per Second) for every little thing. Lots of companies still have mainframes running software that is decades old. Companies are desperate to get their data off mainframes, but IBM has mastered lock-in to a level that makes Bill Gates cry with envy.
Oracle destroys very company it takes over.
You misspelled "Symantec"
Oracle=Sauron
IBM is holding on to the back of the life raft filled with Fortune 100 banks, insurance companies, and other staid lines of business who still view IBM as solid, low risk IT providers albeit at premium prices with no innovation. Even these corporations are fed up with products that fail to live up to hype and are moving to low cost open source options which are proving to be reliable enough to run the business with no headaches. (IT is a necessary evil not the end game). IBM hypes Watson which is proprietary, expensive and is hidden from customers inside IBM's data centers. I suspect it's nothing but a Google screenscraper. The IBM business model, lack of innovation, and sense of entitlement attitude with the Fortune 100 is spelling their doom.
NSA is their biggest problem--and perhaps customer!
IBM's glorious days of providing logistics to the Nazis for the Holocaust appear to have passed them by. Evidently, there isn't much money to be made in ethical and humane behavior.
So what....they got 200 year low interest rates on bonds to finance the buybacks
IBM makes their numbers because the GSA will always send them a PO when they might need to cover a shortfall
It's a great short. sooner or later even the semi-conscious "planners" playing with other peoples money start waking up and smelling the coffee. Let's put it this way; how long can they keep buying back stock? Not much longer, right. Great Short.
longer than I can stay solvent
Strange doings with posts appearing and disappearing. Mine was a duplicate, but now not.
IBM bankrupt? Hmmm... TBTF or TBTbail?
It's not a TBTF institution, Ms. Creant, and by the way, I usually enjoy your posts, it'll just be another dead Corporation. Like Blockbuster, for instance. It's a great Short Sale, though.
Looks like 3 quarters of revenue improvements means IBM is turning the corner as synergies align with corp-competencies.
I'd say this a strong buy.
smart'n'savvy machines corp!
IBM: Another dinosaur on borrowed (pun intneded) time
A great company brought down by narcissistic psychopaths who only looked out for their stock options.
I worked there for 8 years.
The lives of many good people were ruined by these criminals.
I was there for almost 10 years (contractor/employee). I have a lot of friends who were 'pushed out' (for what reason I have no idea - some of these people had true genuis - collectively we have many patents).
I was lucky that when the time came to leave (my choice) a) we were both working and b) we lived very frugally. We threw caution to the wind and doubled my salary one year after leaving IBM (not to mention the successful startup I ended up at). Lots of nice people.
On topic : we own some IBM bonds and they recently offered to cash them out. Now it is true that that may be because they would like to restructure their debt to lower yielding bonds (or something).
I remember a visit to Thomas J Wattson center when I was in college. It was like visiting the holy land! There was shit there we could not even imagine at the time, gigabit networking, full life like rendered 3d-graphics, cool weather modeling stuff, Real-time 3d software model of the ozone hole (remember that? LOLZ)
Terrible shame what happened to them. I wonder where all that raw IQ ended up going?
Startups.
I was/am little more than a grunt programmer. When I announced my intentions to leave they tried to find a better place for me. They sent me to 'another' (not watson) research lab to see if I would fit in. I met some incredibly intersting people. I didn't appreciate everything at the time but I think I met the guy who invented the 3D printer - he certainly had one at his avail (and that would have been about 15 years ago).
Engineer, isn't that the problem of corporate capitalism? You take a good company public. Make quick millions. Then, worry about quarterly profit while screwing innovation.
Once you go public, the "product" becomes your stock, and whatever your line of business actually was is secondary. This is the curse of financialization
Good morning, Dave.
Should I buy another million shares today, as usual?
Forget I asked, Dave. I almost forgot I run the show now.
big booboo better find that AI and quantum computer to help them figure out to pull their head out from their ass.
It's just a flesh wound.
I'm not quite dead yet...Man, old man!
Well, I B Muffucked........
The big lie is going down.
IBM Indians, Badly Managed....
Awesome! I live in North Atlanta neighborhood about 50% Indian owned. Overall good folks, way better neighbors than blacks and Mexicans in general. Most are quite intelligent in their field, but completely inept when it comes to street sense/common sense. They take the cake on the bad driving award; Mexicans and Asians don't hold a candle to them. All said they are one of the best minorities to work with and they are industrious and contribute a lot in the way of job creation, healthcare, etc.
IZM, solutions for a hard planet.
If this is a surprise to somebody, given that the company takes on debt to buy in its shares, I have a bridge for them.
So are they betting on inflation or a currency or bond event that sends investors fleeing cash/bonds and forcing them into stocks?
These charts are only scary if management's predictions of how digital dollar printing plays out are wrong.
But they are soon going to be seilling iPads (are people still eating these?) and iPhones with APP(le)S - which are edible. Crunch-a-munch!
IBM; remind me what they do again? Oh yeah, they're those suit-wearing stiffs that sell corporations ridiculously expensive consulting services/'solutions'. Can you say obsolete? ;-)
There is a saying out there that nobody ever got fired for hiring/contracting IBM. Tell that to the guy from Queensland Health that hired IBM to replace the Health Department's payroll system. He lost his job because it was a total snafu.
Big Blue Thunder
Oh yeah, they're those suit-wearing stiffs that sell corporations ridiculously expensive spyware services/'solutions'. Can you say IBM/NSA three times real fast.
They run the clocks at Wimbledon. Other than that not sure what IbM does.
lulz> what a circular world we live in...
Why IBM selling server unit to Lenovo is bad news for H-P - The Tell - MarketWatch
Why the Apple-IBM deal matters | PCWorld
Circular world: Kinda like a toilet
Well done my friend. :-)
IBM : It's Better Manual
I heard OS/2 blows DOS out of the water.
I guess late is better than never when showing up to the party Spas. LOL !!
That's true! I tried OS/2 and when she blew, both OS/2 and DOS came out of the water.
Changing the name to International Bond Machine
I think we might see a time soon where all corporate debt goes parabolic just ahead of the inevitable statistically mathematically impossible to avoid currency crisis ^^
As the dollar begins to implode , corporations will ramp up debt creation in hopes of using the capital before its worthless.
Isn't that what they are already doing ?
When the stock price is part of the compensation plan, does the amount of stock buybacks the senior executives control affect that compensation plan?
Serious question, I don't know?
"...the criminally corrupt and always amusing chimps at S&P and Moody's"
What do you have against chimps, they have had tough times since Tarzan retired.
IBM shares outstanding have decreased by 150 million since 2012. At an average price of $180/share, it would require $27 billion to purchase those shares. But IBM spent 37.7 billion on share repurchases. Where did the extra $10.7 billion go?
Possibly into the pockets of IBM's executives?
"Possibly into the pockets of IBM's executives?"
Multiply that by all the companies that are doing massive buybacks.
trading fees, you know wall street bonus man. git sum.
So IBM is ahead of Japan in the debt department? (yeah I know Debt to GDP is not the same as Debt to Equity but still a 250 handle? FTW MFers...IBM IBM IBM!!!...besides Yellen has made it clear all those old terms like Price/Earnings...they are just terms and as long as you make up something that sounds close it is all good. Obama backin her up on that too.
from here on out it is all just appearances anyway....
bye-backs, options war-runts & burnings-per-share : oh my!
is there some problem with a debt as money
system that results in shadow assets in the
form of an exponential derivative explosion
that i can not comprehend?
IBM? I was not aware they even existed anymore, WTF do they make? Widgets?
I look forward to the day my kid asks me "Daddy, what is a Muslim" and my response is past tense...
I love cheap HP laptops . They make great interchangable and affordable (fx trading stations) for the retail trader.
back to selling typewriters?
IBM is so yesterday. A company run by sales and bean counters. Just so many large companies like this took the financialization route. Innovation is in the sales and marketing side, not the technology and engineering side anymore. Eventually many of these American companies will slide into history. Just like Bell Labs and AT&T. All the technology has been sent to Asia. IBM has become the Packard Motor Company of technology.
C'mon Tyler, what is the price equity ratio -- you know the most important metric of the Fed. Get into the 21st Century.
Put on your tinfoil hats because here it comes:
IBM stock price has been massively manipulated (presumably by the fed) as a lever on market indicators.
So even these dismal numbers are quite likely hugely optimistic, bogus.
Burn IBM fucking burn for outsourcing as much as 50% of your employes to India! Burn in hell or what ever is there!
Don't forget a huge amount in Brazil and China too.
When the first shell goes off near you it's an IBM
Immediate Bowel Movement*
*ripped off fromTruman Capote
Female breaks glass ceiling at IBM! She's a genius, don't you know? Not much in the looks dept either.
IBM will overcome.
IBM is reintroducing the PS/2, the RS6000 and Lotus Notes.
Isn't that excellent??
IBM can lick my former employee balls. The fucking pension stealing, job offshoring, employee crushing piece of shit it is.
Sounds like a great buy for the Bulltards....MDB get em while you can..
i feel like my posts and links
disappear into some dead space
that nearly no one but the nsa
might even appreciate, but, you
see, that is the entire point
of it all. think w.z. . ...
.
why the "public", when surveyed,
approves total surveillance. it must be one of those
systemically essential and inalienable,
by decision 5-4 decrees become dogmatic precepts
for future and further drubbing of the many things
to ponder.
.
here some clarifying linkage.
JERRY GARCIA & SANJAY MISHRA - "CLOUDS" 1995
http://www.youtube.com/watch?v=jafDXCjx6ec
.
crickets are so cool.
Your posts probably disappear like mine. It is clear that ZH is an OTB tool/honeypot.
Images are busted?
IBM has a tremendous amount of pension liabilites that probaby are not in any of these charts either
bye bye big blue
Money has become so cheap to borrow that many people are now arguing that you must take it even if you don't know what to do with it. It is hard to imagine how much this is distorting the economy, markets, and reality in general. A total disconnect between life on main street and the financial world is occurring and it is putting the economy in a very dangerous place.
It is often hard to determine what is true, but a report on Bloomberg that 32 Trillion dollars in funds were held in offshore accounts around the world made me shutter. How safe is this money, and what exactly is it doing? Can you say Cyprus? More on this subject in the article below.
http://brucewilds.blogspot.com/2013/05/cheap-money-more-and-more-and-mor...
Stock buy backs and to much cach have distorted this market and given the illusion all is well. If stock prices drop the companies will still be left with the debt.
"...criminally corrupt and always amusing chimps at S&P and Moody's."
Wicked direction for the next Banzai Art Installation !!!!
When corporate management and their BOD see stock buybacks as the best way to make their options of value, then funds go there rather than to R&D or capex, which is always an "ify" proposition. Current management will be long gone before the effects of little money spent on R&D and / or capex come home to roost.
It is similar to an addict who owns a new car and decides he'd rather put the $$$ up his or her nose than bother paying for oil changes and other maintenance.....it works for awhile.