QTC You are certainly correct that the debt and dividend are going to be split, BUT don’t be surprised if IBM doesn’t shoulder Newco with more of the Debt and more of the dividend. They could justify this due to the “investment” infrastructure takes. NOTE the article below. This would mean Newco’s growth strategy would have to be based on automation and layoffs (cost reduction). I would think they would lean quite heavily on automation, as their long term strategy, with layoffs being implemented ASAP to get a leg up. The early layoff strategy would also allow IBM to over stuff Newco (the lenovo strategy) and avoid the bad press. Shouldering Hybrid IBM with less dividend and less debt allows IBM to invest in a marketplace that is accelerating away from it. Their growth strategy is most likely buying “NICHE” companies that cater to what IBM does best (Enterprise/Mainframe) Time will tell, but that tick tock you hear is Wall Street saying IBM we know you are lying because your lips are moving. Wall Street wants results and they made that abundantly clear on the analyst call in 4th q. The Current CFO and CEO have lost all credibility with Wall Street, and I expect a change after the streamlining is done. They are doing the dirty work abet at a much slower pace than expected, and will be rewarded when they exit. The Navy always changes captains after they reform their ship as the crew will not fight for Captain Bligh
https://seekingalpha.com/article/4406466-ibm-misunderstood-growth-strategy