IBM's $3.5 billion stock buyback plan adds to the $10 billion already spent

Article Abstract:

IBM announced a $3.5 billion buyback of its common stock, following a series of buybacks totaling $10 billion since Jan 31, 1995. The stock repurchase comes as IBM stocks soar to nine-year highs in Nov 1996, leading analysts to suggest that IBM might have invested more wisely in new growth or acquisitions to bolster its technological strengths. Analysts suggest Bay Networks and Netscape as potential acquisitions that could prove extremely valuable to IBM, giving it a stronger presence in the networking and Internet products markets. Both companies are valued at approximately 4.6 billion. IBM generates $5 to $6 billion in excess profits a year. Other recent investments include $500 million for disk-drive plants and $743 million to acquire networking software maker Tivoli Systems. IBM is not planning any imminent major acquisitions. The company's largest purchase was its 1995 acquisition of Lotus for $3.52 billion.

Company investment, Investments, Company analysis

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Big Blue chooses confidant of Gerstner as executive to complete turnaround

Article Abstract:

IBM has selected G. Richard Thoman to succeed outgoing CFO Jerome B. York, the person most credited with IBM's recent financial turnaround, and who is leaving IBM in order to concentrate on a takeover of Chrysler Corp. Since Jan 1994, Thoman has been overseeing IBM's troubled personal-computer operation, which sustained a $1 billion loss in 1994, and now faces the difficult task of completing the $8 billion annual overhead reduction promised by York. Ten thousand IBM employees may be layed off to ensure that the company adequately reduces expenditure and maximizes profitability. Thoman is more mild-mannered than York and is expected to coexist better with IBM Chmn Louis V. Gerstner, with whom Thoman has worked at numerous companies. Thoman has a Phd in international economics, and his choice as successor is generally approved.

Management, Officials and employees, Appointments, resignations and dismissals, Thoman, G. Richard, York, Jerome B., Company Business Management, Company Operations, Company Employee Status Change

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IBM is offering to buy back preferred stock; move could use $1.1 billion of huge cash hoard to cut dividend costs

Article Abstract:

IBM is offering to buy back $1.1 billion in preferred stock that it made available during a financial crisis, which would cut expenses and partially answer the company's cash reserve problem. IBM sold the preferred shares in May 1993, during a drastic financial downturn that led to a cash shortage. It marked the first time the company turned to preferred stock to handle short-term financial needs. With IBM's return to profitability and a cash surplus of nearly $11 billion, the company is offering to buy back the stock at the original price, viewing the 7.5% dividend payments on the stock as an unnecessary expense. IBM expends nearly $20 million per qtr paying out dividends on the preferred stock, only a small portion of the $710 million the company posted as net income before dividends in the 3rd qtr of 1994.

Purchasing, Cash flow, Preferred stocks, Stock, Company Dividends

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