Confident IBM plans for a 2-for-1 stock split; move puts shares in reach of small investors, cuts impact of swings on Dow
Article Abstract:
IBM plans a 2-for-1 stock split in a move to reduce stock volatility by making its common stock more attractive to small investors. The plan is also a sign of confidence in IBM's future. Concerns over revenues have pushed stock prices down 13%, but the stock-split announcement and a analysts rating upgrade helped prices surge to $150.75 on Jan 28, 1997. The company's stock prices have risen and fallen sharply in the second half of 1996, due to differing investor opinions. Smaller investors, who will now be more able to afford Big Blue securities, tend to be more loyal than large institutional investors. IBM stock, currently the ninth most expensive on the exchange, also has a disproportionate effect on the Dow Jones Industrial Average. While a stock split is risky, since a fall in value could leave stock at extremely low levels, it may help IBM revisit, in adjusted figures, its stock price record high of $175 attained in 1987.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
IBM's history raises doubts about Lotus acquisition; some wonder if company this time can keep vows while integrating Notes
Article Abstract:
IBM is expected to have a difficult time trying to integrate Lotus and its Notes workgroup software into its software strategy if the past is any indication. The company has attempted a few big acquisitions in recent years, including Rolm and Metaphor, which have been detrimental. The $1.5 billion acquisition of Rolm in 1985 was at the time the company's largest purchase, but by buying into an entrepreneurial company in a fast-growing market segment, some were skeptical of the company's prospects. IBM had promised to maintain the autonomy of workers and assured employees their freewheeling corporate culture would not be affected. Less than one year later, the acquisition was in trouble and IBM's promises disappeared as losses mounted. Experts wonder how IBM can keep its promise to Lotus while attempting to integrate Notes into its product lines.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Nonresponse and delayed response to competitive moves: the roles of competitor dependence and action irreversibility
- Abstracts: Consensus forecasts of financial institutions. part 6
- Abstracts: MCI reports rise in profits and plan for a 7% staff cut. Assessing a big fish in a deepening pond. Top British wireless carrier joins battle to acquire Airtouch
- Abstracts: Unisys plans to cut jobs in a major reorganization. For Digital's chief, a last grab for glory; investors want results, not excuses
- Abstracts: IBM's second-period profit fell 22%, but positive outlook lifts stock 13%; results cheer Wall Street, offering upbeat signal on technology sector