https://finance.yahoo.com/news/ibm-closes-34-billion-deal-123544178.html
Some real chucklers in there:
"Underscoring the drive into high-margin businesses, IBM in October agreed to buy Red Hat"
12% is high margin?
"Since 2013, IBM’s cloud revenue as a percentage of total revenue has grown six-fold to 25 percent. In the 12 months through the first quarter of 2019, cloud revenue exceeded $19 billion."
Anyone who believes that 25% of IBM revenue is "cloud", boy do I have something to sell you.
Count down started now for bigger RA next year.
@1pjc: Couldn't agree more -- the avalanche of so-called training is patently absurd. So much so that the message being sent is that what few of us remain, the priority isn't on real work, but jerking around watching two week's worth of training videos. Absolutely beyond preposterous. Guess they really don't care about their hallowed NPS.
So if nothing changes, we paid 34 billion for a 3.4 billion company. (Approx a 4% ibm revenue increase) and we got perhaps 450 million in earnings Again approx a 4% increase in earnings Man can IBM negotiate or can IBM negotiate. I hope Redhat has some magic growth formula baked into their plan because a whole lot of synergies need to happen for this to payoff
@1pjc IBM wants us to believe that they paid Red Hat 34 billion dollars to not change a thing. What does IBM get for its money? A current partner becomes a subsidiary, but not a single change to its culture, products, management, relationships, people..... How stupid does IBM think we are.
IBM employees are flooded today with propaganda.... er, "training" on the acquisition. They say over and over again that Red Hat will remain independent! They say it so often you know it must be a lie. Besides, 20 years of IBM acquisition history does not lie.
Late breaking news!
Red Hat will immediately refocus toward delivering AS/400 on the cloud. Layoffs are not planned but all staff must rellocate to Omaha Nebraska by September to avoid being RA'd. To improve IBM synergy, all managers will be replaced by Armonk based directors and VPs who formerly worked their magic with SPSS, Cognos and Lotus. To help brand recognition, the new business segment has been renamed IBM Blue Hat™.
Get ready to watch Ginni destroy another company and product set.
There will be a revenue bump as it gets baked into all the ELA's. A lot will be pulled in for early renewal as well, so figure they'll see some aggregate revenue for the next 4-6 quarters, then, when all the reps have their new BMW's, it'll fall off a cliff. But that's about the time the next mainframe cycle will hit, so there's another block in the ponzi scheme that'll postpone the collapse. Net is that cycles will mask problems until late 2021 or so.
The wild card is if the rest of company's revenue drops, or if there's a recession, IBM will run out of cash to service both debt and dividend (let alone buybacks), and it'll be GE all over again.
Yeah, what a joke! I will be listening to the next earnings call to see if they up earnings guidance for the year. They have now 2 quarters before the end of 2019 as a combined company.
To be frank, by year end everybody will realize that that acquisition was the biggest mistake ever... not to mention the 34 Billion spent on it.
AssHat deal is closed