IBM: The B Turns From "Business" to "Bailouts" to "Buybacks" ("IBM is the Next Intel")
Trying to shore up the falling share price/stocks while veteran workers and Vice President (with high salaries) are cut off. From recent hours:
IBM is disintegrating. The US Government can see this. Will it intervene in another "I" (IBM, like Intel)? Will it [i]nvest, [i]nject capital, or [i]ntervene some other way to pretend a failing company is doing OK and is competitive?
Yesterday we wrote about censorship of IBM critics (even insiders!) and why IBM was dying while hiding all the layoffs (apparently a thousand IBM layoffs aren't enough to trigger a WARN notice or even a single article in the press!)
Some months ago IBM was compared to Intel for the following reasons:
IBM is the next Intel — stuck in financial engineering, not growthAs a retail investor, I’m sounding the alarm: IBM is probably one step from an Intel-style collapse, despite still being hailed as a “safe” dividend play. Let me break it down:
Why I see IBM as Intel 2.0
Execution lag: Intel suffered chip delays. IBM’s pivot to cloud and AI has been painfully slow.
Missed growth waves: While NVIDIA, AWS, and TSMC capitalized on explosive growth, IBM has mostly sat on the sidelines. IBM's Watson AI is mediocre and IBM consulting is bloated and overpriced.
Cultural drag: Bureaucracy and old school leadership / inertia chain both companies to outdated models. Both companies have been brutal to employees.
Financial engineering over innovation: IBM leans heavily on spin‑offs, cost cuts, and buybacks, reciprocal revenue arrangements propping up EPS in the short term but starving real growth.
Brutal reality: Time-travel to 2013 and you’re basically nowhere
If you invested in IBM back in 2013, your total return even including dividends was negligible. In fact, that year the total return was a slight –0.18% . Over the last decade-plus, that means flat to slightly negative growth. Meanwhile, broader tech and indices soared.
To put it bluntly: A decade wasted, all the while dividend checks kept eyes off the fact that IBM underperformed and stagnated. Meanwhile, broader tech and indices soared. The recent post earnings dip seem to reflect this reality. What do you think?
When will IBM's bean-counting be audited like Kyndryl's? Currently, the auditor of IBM's accounting is on IBM's payroll. This is a recipe for disaster. █