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[waldron] 19/4/2013 06:24

2nd UPDATE: IBM in Talks to Sell Part of Its Server Unit to Lenovo
PrintAlert
(Adds Lenovo confirmation in the sixth paragraph.)
By  Spencer E. Ante And  Sharon Terlep
International Business Machines Corp. is looking to part ways with the servers that have powered much of the Internet.
The company is in advanced discussions to sell its so-called x86 server business to China's Lenovo Group Ltd., people familiar with the matter said.
An exact sale price wasn't known, but one of the people said a deal, if one is struck, could be worth billions of dollars.
IBM doesn't break out server revenue, but Morgan Stanley estimates the x86 server business generated about $4.9 billion of the company's $15.4 billion in server sales last year.
News of the talks surfaced as IBM reported a disappointing quarter, with particularly weak hardware sales. IBM's shares dropped 4.9% in after-hours trading on Thursday.
Lenovo said in a separate statement to the Hong Kong stock exchange that it is in preliminary negotiations with a "third party in connection with a potential acquisition." But it said it had not reached any agreements.
As when IBM announced plans to sell its personal computer business in 2004-also to Lenovo-a sale would signal a sea change in the computing market.
The x86 servers were once a fast-growing and lucrative technology that lifted sales at companies like Hewlett-Packard Co. and Dell Inc., which still rely on them for billions of dollars in sales.
IBM, having struggled to compete with those companies, now may stop selling a product that produces the server market's highest volumes but lowest profit, according to industry analysts.
In 2012, IBM was the No. 3 player in the low-end server market after H-P and Dell, according to technology research firm Gartner. IBM ended the year with 15% of the market by revenue, down from 16.4% in 2011, according to Gartner. Meanwhile, H-P's share fell to 32.4% from 35%, and Dell's slipped to 21.4% from 21.8%.
Dell said it has seen strong growth in x86 servers. A spokesman for H-P declined to comment.
It wasn't clear how advanced IBM's talks with Lenovo were or whether a deal would materialize. Technology trade publication CRN reported the talks earlier Thursday.
IBM has a history of aggressively shifting its business mix to areas with better growth and higher profit margins. The company shocked the technology industry when it agreed to sell off its PC business to Lenovo before personal computers had been largely commoditized. IBM then beefed up its operations in higher margin software and consulting businesses.
A sale of the low-end part of the server business would fit this pattern, as new Chief Executive Virginia "Ginni" Rometty looks for ways to expand the company's revenue and earnings. A divestiture of the x86 business would mark Ms. Rometty's first major asset sale since taking over the top job a year ago.
IBM is likely to hold on to the higher end parts of its server business where it can generate a competitive advantage. IBM invests billions of dollars in research and development to help fuel the development of its mainframe computer business, where it remains the industry's dominant player. The company makes the computer chips, operating system and much of the infrastructure software that powers those machines.
The acquisition marks a significant shift in strategy for Lenovo as the Chinese company has primarily focused on PCs. Nonetheless, it has taken some steps to boost its server business. In an agreement last summer, Lenovo began cooperation with U.S. data-storage provider EMC Corp. to jointly develop and sell servers and network storage, a move broadly seen as a play by Lenovo to boost a still nascent business for the company. Lenovo Chief Executive Yang Yuanqing said at the time the company is first targeting the China market before going abroad, and it is the company's goal to become the country's biggest provider of servers. Lenovo is a small but fast-growing player in the low end server market. Last year, the company saw more than $360 million in worldwide x86 server sales, up from about $154 million in 2010, according to tech research firm Gartner.
News of a possible sale came as IBM ran into trouble in the first quarter of 2013. The company said its profit fell 1% to $3.03 billion as its revenue dropped 5% to $23.41 billion.
The computer hardware business was a particular area of weakness. Total revenue for hardware systems declined 13% in the first quarter, and the business reported a pretax loss of $405 million. While sales of mainframes rose 7%, sales of IBM's x86 products-"System x"-fell 9%.
The market for x86 servers, named for the chip design used by Intel Corp. and Advanced Micro Devices Inc., grew quickly in the 1990s as the Internet took off. But technologies like "virtualization" let users squeeze more power out of fewer machines.
Moreover, some high-growth Internet companies like Google Inc., which in the past would typically have purchased large numbers of x86 servers to power websites, now make their own, hurting the growth potential of the market.
Juro Osawa, Paul Mozur and Ian Sherr contributed to this article.
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[waldron] 10/4/2013 16:19

De sources de marché, le broker UBS (Xetra: UB0BL6 - actualité) vient de revoir à la hausse, de "neutre" à "acheter", sa recommandation sur le titre IBM (NYSE: IBM - actualité) à Wall Street. L'objectif de cours est fixé à 235$. Le Groupe publiera ses résultats trimestriels le 18 avril prochain....

[energyi] 27/1/2012 14:47

IBM = In-Built-Momentum : Up or Down ?

5 day chart


Daily- delayed


Weekly
xx
=== ===

SPY-15min

T7 - delayed

T8 - delayed

[dil] 11/3/2004 20:33

lol , we live and learn (but I always knew a bit more about them than I ever let on) :-)

[march] 11/3/2004 19:16

>Gausie :-)

[gausie] 11/3/2004 18:38

Charts? Who needs 'em?

[dil] 11/3/2004 09:55

Still waiting .

[dil] 22/2/2004 11:35

Thanks energyi just thought the one year may show it more clearly. Doesn't it look like a breakout from the $90 level to you ?

The $90 target in the opening post , is that your current target or the target when you started the thread last year at sub $90 , its a bit confusing.

Cheers.

Dil

[energyi] 21/2/2004 23:54

4 year weekly charts are already there

[dil] 20/2/2004 23:46

As this thread is over a year old could you please put a 1 year chart in the header ?

Thanks

Dil

PS Medium term it looks to me as though 120 is easily achievable regardless of what some self proclaimed guru says on the tele but what the 'eck do I know !

[energyi] 20/2/2004 19:33

Note:
EXITED my IBMOT puts at $3.50, on today's Dip

[energyi] 20/2/2004 16:26

Yes.
But before we get to IBM-$95, we must first get thru some support
at IBM-$97.29 today's low

IBM Options, march expiry: $97.35

CALLS.................. : PUTS
90.00c.IBMCR 7.70-7.80 : p.IBMOR 0.30-0.35
95.00c.IBMCS 3.50-3.60 : p.IBMOS 1.10-1.20
100.0c IBMCT 0.95-1.00 : p.IBMOT 3.50-3.60

[adorling] 20/2/2004 15:42

I'm short at $99.75 and agree that $95 might see some support. However, if the markets fall as they often do in mid Feb to mid March it could go lower.

[adorling] 20/2/2004 15:42

I'm short at $99.75 and agree that $95 might see some support. However, if the markets fall as they often do in mid Feb to mid March it could go lower.

[energyi] 20/2/2004 09:00

Next BIG support? about IBM-$95

[energyi] 19/2/2004 16:02

IBM loses another round in important pension case for 140,000 employees
February 18 / By Brian Bergstein, AP Technology Writers

NEW YORK (AP) -- IBM Corp. owes back payments -- possibly worth billions of dollars -- to 140,000 older employees who were harmed when the technology giant converted to a new kind of pension plan in the 1990s, a federal judge has ruled.

The plaintiffs in the case want IBM to make up for what they lost after the company adopted a "cash balance" pension plan, which pays workers a lump sum when they leave the company. A federal judge had ruled last July that the plan amounted to age discrimination because it unfairly penalized older employees.

IBM argued that it shouldn't be forced to make retroactive payments because it could not have foreseen that the judge, G. Patrick Murphy of U.S. District Court in East St. Louis, Illinois, would declare the cash balance plan illegal.

But in a ruling dated Feb. 12, Murphy wrote that IBM had no justification for claiming it was blindsided by his decision.

"The prohibition against age discrimination existed long before the appearance of cash balance plans," Murphy wrote. "All that has changed is IBM's clever, but ineffectual, response to law that it finds too restrictive for its business model."

Murphy has yet to decide the damages IBM should pay or how the figure will be calculated. Under one formula suggested by the plaintiffs, IBM has estimated the payments would total $6 billion.

IBM spokeswoman Kendra Collins said Wednesday that the company doesn't believe it should pay anything. She said IBM expects to win the case on appeal.

"We continue to believe that our plan is legal," Collins said.

The case is being closely watched because IBM was one of several companies that adopted cash balance plans in the '90s.

Traditional pension plans reward workers for sticking with a company, awarding them more retirement benefits during their last years of service.

In contrast, cash balance plans give workers individual "accounts" that workers can track over time, although they can't allot any of their own pay to the plan or decide how it is invested. The advantage is that workers can take the money with them if they leave for another job, which can make cash balance plans more appealing to younger workers.

Opponents of the cash balance plans say that if they are instituted when experienced workers are near retirement age, that essentially changes the rules late in the game, depriving the employees of anticipated gains and leaving them without enough working years to accrue equivalent cash balance benefits.

[energyi] 03/2/2004 17:22

We got that higher Tick on lighter volume