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Stocks B / Berkshire Hathaway


Subject:  Re: IBM the lost decade Date:  1/31/2020  9:56 AM
Author:  Kingran Number:  247244 of 253539

Arvind needs to cut dividends, perhaps borrow more money

IBM still throws of tons of money, and remember they have paid back $10B of debt they borrowed for RedHat, in 3 quarters. I think IBM has sufficient cash flow to invest and do M&A. If required they can borrow. I don't think they will cut dividend, hopefully they may not raise it or slow walk the raise.

Put money in enriching IBM cloud rapidly.
Accelerate on-boarding its existing global clients to IBM cloud and not escape to AWS/Azure.

IBM's hybrid cloud is an interim attempt at stop the bleeding. The endgame is clients will go to AWS/ Azure, and IBM's of the world will build value added solutions and service on top of that. Industry specific solutions, or solutions that involves their IP.

Perhaps make a play to acquire GCP. Not a right fit for Google.

Whaaat??? GCP is a strategic asset for Google, and you think Google is going to sell it? Take a second and realize, the Hadoop, Apache, and so many big data, AI, machine learning originated from Google. Now instead of Open Source they will go straight to GCP. GCP may be a 3rd in cloud platform, but it is a significant platform with a staying power, far greater than IBM's.

I would conservatively value GCP is worth anywhere between $150 to $200 B. Let us assume suddenly google decided to sell it, do you think IBM can afford such a price tag?
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