When all else fails, and there is no growth, what you gonna call? Buybackbusters!
A week after IBM reported atrocious earnings, due to a variety of issues but most of all because it simply repurchased the least amount of stock in the past quarter in years (as it was approaching the limit of its buyback authorization), Big Blue is back to doing the one thing it does well: the buyback of things, in this case revealing its board has just authorized $5 billion in stock buybacks through April 2015 which means that with the $1.4 billion still under authorization, IBM is set to purchase about $3.2 billion in Q4 2014 and Q1 2015, each. And then, in April 2015, IBM will ask for an even bigger stock buyback authorization from its board. Which, clearly, the board - whose IBM stock will promptly rise as a result - will grant.
Just released by IBM:
The IBM (NYSE:IBM) board of directors today declared a regular quarterly cash dividend of $1.10 per common share, payable December 10, 2014 to stockholders of record November 10, 2014. With the payment of the December 10 dividend, IBM will have paid consecutive quarterly dividends every year since 1916.
The board today also authorized $5 billion in additional funds for use in the company’s stock repurchase program. IBM said it will repurchase shares on the open market or in private transactions from time to time, depending on market conditions.
This amount is in addition to approximately $1.4 billion remaining at the end of September 2014 from a prior authorization. With this new authorization, IBM will have approximately $6.4 billion for its stock repurchase program. IBM expects to request additional share repurchase authorization at the April 2015 board meeting.
Ginni Rometty, IBM chairman, president and chief executive officer said, "We will continue to make the investments and changes necessary to manage our business for the long term and to shift to higher-value offerings. At the same time we remain fully committed to returning significant value to shareholders."
The only question is whether IBM will have enough cash flow to fund these buybacks organically, or if it will need to issue even more debt. Which could be problem, because one of these days the rating agencies will finally look at the charts below and downgrade IBM to junk, thereby ending the "buyback of things" party first at IBM, and soon, at all other so-called Investment Grade companies.
So they can put $5 Billion into a stock buyback while cutting promises made to retirees?
Amurika!
And remember, they just PAID Global Foundry $1.5 billion to take their chip fab. I'm blinded by their brilliance.
Just give the retires an old Selectric and tell em to stop their bitchin!
IBM is one of the biggest cunts of the American corporations because of that very thing. Lies to make their numbers and executive bonuses.
Fuck them!
Over $400 million per year in interest expense and that's with the fed rate at 0.25%
If rates ever get back to normal levels, half these corporations will all go into Ch 13.
my best friend's sister makes $80 /hour on the internet . She has been laid off for 7 months but last month her paycheck was $13987 just working on the internet for a few hours. visit site... www.Yelptrade.com
International Buyback Machines
or in private transactions from time to time
No further questions your honor.
Line executive sellers line
Read between the lines.
The number of bagholders would appear to be shrinking. I guess they can take comfort in knowing that they will be worth moar...
/s
IBM has always been a leader in the buying back of its shares. Their ability to innovate and continually 'push the envelope' in this field is what's allowed them to maintain a dominant position in the tech sector for so many years. It's nice to see them maintaining their form, and I for one am looking forward to seeing the exciting new developments they are able to bring to market in the 'share buyback' category over the coming years. This continuous innovation is what makes the tech sector so exciting to follow!
buyback app
u2 can boost your small biz profile by buying back your ... uh, er, ...
Financial engineering can work for a while. Innovative ways to boost the stock price.
I can't wait to see how a loss would be calculated. Its a double edged sword, a loss will be spread over fewer shares, and actually will occur at the lowest point of shares outstanding, at which time the share-repurchase plan will be terminated to conserve company's cash...
Sustainable. Efficient. Bullish.
"Just released by IBM:"
heh heh ... before 1pm on east coast
gotta love these board meetings
directors making $thousands/meeting ... quick work ... all in favor of boosting dividends and buybacks ... good good ... break for lunch and hit the links
Keep borrowing with cheap Fed money and buying back shares until they can no longer borrow.
If they get in trouble Uncle Scam is there to bail them out.
If they get in trouble Uncle Sam the taxpayer is there to bail them out.
I almost feel bad for the people buying the stock. The corporate heads are doing this so they can exercise their stock options at a higher price and sell their shares to the company. That's the net result - insiders sell their shares to the company. If they were bullish on the company, they would be trying to do the opposite.
Insiders might be evil, but they're not stupid. Same with the fed. Same with the government. Same with basically anyone in a position of power.
But I thought they were going to create jobs with that money.
yeah, someone will have to hire a trader to buy back all those shares.
Its the algos that get hired, no trader. Rise of the machines, bitchez!
so... fewer shares outstanding mean less has to paid out in dividends...whoopee...they can use what's left for ...more buybacks!! I wonder who will be left holding the last share of the then hugely indebted formerly massively important titan of American industry.
If it is me I'll take a seat on the board....maybe they'll let me crash in the C-suite boardroom.
You get to have Bloomberg and CNBC scroll that your EPS is crazy good even though you are in full retreat and not selling any international business machines.
IBM has bought into the "eventual self-starting recovery" myth. They're betting eventually organic, real growth will occur and rescue them from their coming mountain of debt.
Their worst outcome would be: rising rates amid a secular economic slump. Bring it on.
Kred...keep up...neither rising rates nor economic slumps are tolerated. The ability to buy old copies of National Geographic to hold on the Feds balance sheet allows printing of all the cash needed to keep this market upright and proud right up to the moment the currency is abandoned by all. Hyper inflation is painless...up to a point...it is the treatment of choice for most fiat monetary ills.
No, it WILL happen. But it will, as you say, be covered up. Extend-and-pretend. Hide. Deny. Propaganda barrage.
Underneath all this bullshit, the FREE MARKET still calls the shots. It's not dead...just suppressed...and eventually this will all collapse under its own weight.
It's only two to three years of current earnings to pay off all their debt.
And they can take the risk. The Fed has got their back...
Think.
The MIC circle jerk of lost causes SAYS Buy ONE and we'll only spy on you on days ending in Y.
The NSA's main function is to destroy trust in all American electronics. Soon even the parts of the government that wish to keep somethings private will be buying Russian made 'no spyware' devices.
I mean - look - they'd be fucking idiots to NOT bb their own stock right now.
What do you want them to do - pay taxes?
R&D = ReDistribute.
All those geniuses at IBM can't figure out anything more rewarding to do with the company cash than to buy IBM stock? Right.
IBM, Indians Badly Managed...
International Biryani Machine
Stamped approval by the FOMC.
buying stock at all time highs or in IBM's case, the highest the stock will be in years to come - that's always smart
so what's next?
corporate bond defaults - that's always nice.
yellen shits out her mouth at 2pm tomorrow - ready for all time highs again?
"IBM, Indians Badly Managed..."
Until some Indian or Chinese company buys out the company and it's CEO and directors get outrageous packages.
Isn't that the way huge corporations are managed these days in the US?
InfinitelyBoringManagement...
In Bred Management
Completing the circle.
Repurchased shares become treasury stock, which later can be reissued via board directed compensation packages and stock options for... executives and members of the board of directors.
Earnings? We don't need no stinkin'earnings.
A hostile takeover of Kim Kurdishian's mobile app. might help.
So, what happens when NYSE and DOW component stocks have, like, 3 shares apiece trading back and forth? Will DOW be at 50k?
Buffett got his wish.
In the 2011 Berkshire Hathaway annual report Mr. Buffet discusses the strategy of share repurchase and uses his recently acquired 63.9 millions shares of IBM (at $169/share) as an example.
"Naturally, what happens to the company’s earnings over the next five years is of enormous importance to us. Beyond that, the company will likely spend $50 billion or so in those years to repurchase shares. Our quiz for the day: What should a long-term shareholder, such as Berkshire, cheer for during that period.
I won’t keep you in suspense. We should wish for IBM’s stock price to languish throughout the five years."
One has to wonder however if six quarters of sales declines were also in his wish list.
Companies have been turned into revenue streams for shareholders, nothing more. Continued poor earnings will result in further cannibalization, until the company fails and is broken up and sold for parts.
I hope it continues...that these behemoths start crumbling, and are eventually devoured by the locusts they allowed in. Whatever it IS that they do or make will be done or made by someone else, if people want it and are willing to pay.
And maybe companies will start refusing to go public, and open themselves to vultures from within. Start KEEPING their companies in private hands rather than let Wall Street touch them.
Maybe we'll see a company "sell" it's shares to the employees of that company, and keep them in-house, or restricted to loyal investors only.
Start locking out these professional "investors" who only want to haul away as much as they can, as fast as they can.
I would LOVE to see a trend of profitable businesses that refuse to deal with Wall Street, love to see a successful company proudly show off its profiting and growing workforce as it gobbles up market share from a dwindling pool of dying mega-corps, whose frustrated shareholders can only watch their portfolios shrink. If they should find themselves suddenly 'frozen-out' of more and more companies, and all that money was out of their reach, what would they DO for a living?
Well, we'll probably find out soon anyway, because even without a Great Awakening of business, they are killing their egg-laying geese. Opportunities for profit will become fewer and smaller. They're gonna have to figure something out, or else get ready to join the rest of us down here in the land of Lowered Expectations.
With the large option positions of officers and directors, is it any wonder that they vote to buyback stock????? IBM is not alone here.
Eventually this use of capital will doom the company as cap ex and R&D are reduced to fuel more stock buybacks.
ibm will be prairie doggin soon enuf
time to play wack a mole
Hah hah ha Buybacksters,
This is the trap for all these capitalists.
Similarly with all the easy money from QE, the capitalists will make this final mistake in the hope that buyback will boost share price.
However the market is actually dominated by robots,
One day these robots as well as investors will start selling like hell
Then all these capitalists will lose everything , QE money as well as the value in their stock.