IBM Buying Back $12.5 Billion In Stock

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IBM announced today that it has contracted with three banks to buy $12.5 billion of its own stock back making this the largest accelerated stock repurchase ever.

IBM had already announced that it would be ramping up its already massive stock buyback, and the technology company also had said it expected to borrow money to get it done. But a Tuesday filing with the Securities and Exchange Commission revealed the big scope of the project.
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Nah man its to pay for all the hookers and coke bought on company credit cards by upper management. ;)
 
Its just IBM following GM down the blackhole to oblivion.

Wonder if the stockholders would rather get the $$ in dividends, and only the CASH the company has, NOT the $$ they want to borrow. So instead of just using the stockholder's money to buy back stock, they wanna borrow money as well.

Frikken unreal.
 
xX_Jack_Carver_Xx said:
Its just IBM following GM down the blackhole to oblivion.

Wonder if the stockholders would rather get the $$ in dividends, and only the CASH the company has, NOT the $$ they want to borrow. So instead of just using the stockholder's money to buy back stock, they wanna borrow money as well.

Frikken unreal.
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Don't be fooled...IBM is the largest, richest, and most influencial IT firm in the world.
First of all, $12.5 BILLION is only 8% of their outstanding stock.
Secondly, IBM used one of it's subsidiaries overseas to purchase the stock so they would not be charged taxes on it by buying it out of their local US funds.
Thirdly, IBM generates $15 BILLION a year in cold hard cash, with only 700 million in losses.

They aren't hurting by any means, and aren't going anywhere, and their stock has never been a bad purchase.
 
Essentially what they are doing is shifting away from using equities for fundraising to using debt. THere are alot of circumstances where this can be beneficial to the company. I have no idea the particulars of why they chose this route but there are financial and corporate strategies that they can be trying to do that call for reducing their market capitalization and shifting into debt.
 
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