I suggest you click on my previous post before dig into IBM performing: “How does IBM make money? What’s next?” Only in this way can we have a basic understanding of the company and business of International Business Machines (ticker: IBM).
The battle of market capitalization
The market value of listed companies is the most objective way to judge business efficiency and company value, and it is most appropriate to use it to discuss IBM’s operations.
Microsoft vs. Intel
I have published articles on “The rebirth and fall of 4 major technology stocks in 10 years” and “How bad is Intel right now?” A similar case was mentioned in these two posts. I compared Microsoft and Intel–twelve years ago, with the same market capitalization, one company ascended to the top of the world’s market capitalization, and its stock price increased 12 times.
Another company, Intel, has fallen from the global semiconductor throne, repeatedly giving up all the crowns it once held. What’s the current situation at Intel? Interested readers please click on my article “How bad is Intel right now?” and “Will Intel go bankrupt?” These two posts will give you a better understanding of the tragic situation of this company.
Microsoft vs. IBM
Now let’s take a look at IBM, the protagonist of this article. 12 years ago, IBM’s market value was about the same as Microsoft’s, and its revenue was greater than the latter’s (please click on my comparison chart of revenue between Microsoft and IBM over the past ten years in “How does IBM make money? What’s next?” . You can see IBM clearly at a glance.
But what now? IBM’s current market value is only one-sixteenth of Microsoft’s!
What has IBM transformated?
Spinoff and divestiture
Just like when you click on my “How bad is Intel right now?“As seen in “Intel has been forced to be a seller, split up (please click “Intel is spinning into five separate companies) and suspended dividends to raise the company’s cash flow, and is currently developing , company is fighting to defend its survival, as corporate vultures and activist investors from all sides are taking advantage of the sharp decline in Intel’s stock price to make various plans for acquisitions or acquisitions.
IBM is better than Intel, and IBM is much larger than Intel. It is a typical diversified technology group, unlike Intel which only focuses on the semiconductor business. But basically, I have been a seller all the way, selling valuable parts. At best, it means removing the waste and retaining the essence, but at worst, it means poor management of the company.
The more famous ones are the spin-off of Kyndryl (ticker: KD) and the sale of the wafer manufacturing department to GlobalFoundries (ticker: GFS). For details, please click “How does IBM make money? What’s next?“
IBM has more time to respond
The difference between IBM and Intel is that Intel has all happened in the past 20 years, while IBM has happened in the past 40 years. IBM’s market capitalization was very large forty years ago, and its stock price showed a slow decline trend, rather than a sharp decline; this gave IBM time to calmly respond. However, in the past five years, especially this year, Intel has often experienced plunges of more than 10% many times, which easily frustrated the management, leading to today’s situation.
Related articles
- “Satya Nadella brings Microsoft back to glory“
- “How’s IBM performing these years?“
- “How does IBM make money? What’s next?“
- “The rebirth and fall of 4 major technology stocks in 10 years“
- “How bad is Intel right now?“
- “A series of Intel decisions led to where it is today”
- “Will Intel go bankrupt?“
- “Intel is spinning into five separate companies
- “Institutional imperative – the good, bad, and ugly“
- “Oracle’s cloud computing and AI finally recognized“
- “Microsoft, the dominant overlord of cloud computing“
- “HPE expertizes on enterprise technology services“
Disclaimer
- The content of this site is the author’s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.
- I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers’ direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.
