Earnings manipulation may not be at the top of the list of reasons for IBM's stock buy-back. Lack of investment opportunities in the current market may be a good reason.
Ever since IBM transformed itself from a manufacturing giant to a global "services" company it has found itself flush with cash it did not know what to do with.
Thanks to the chinese, the returns on manufacturing have plummeted in the US while relatively muted competition in the global services markets (after all our competitive advantage is in human capital) has kept the returns high.
The company alludes to this saying that spending on technology is "stabilising".
As far as I know, trading in equity is a relatively recent phenomena in history and reflects the sophistication of markets. If the markets are dumb enough not to recognise the games that the companies play, we have no right to look for an earnings-terrorist behind every corporate move.
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