The International Business Machines Corporation: IBM

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The International Business Machines Corporation (IBM) is an American multinational technology and consulting company. IBM holds a highly diversified product and service portfolio and despite that some of its operations breach into different industries - ranging from global business services to global financing business - its core business lies within the information technology services industry. Within its core business the firm manufactures and markets computer hardware, software and offers infrastructure and consulting services in vast areas such as nanotechnology and cloud computing. The company was founded in 1911 through a merger of three companies and now has its headquarters in Armonk, New York. IBM holds 435,000 employees …show more content…

The newly crafted business model shed commodity business and instead centered around high-margin opportunities, resulting in pervading divestment of low-margin industries. The company regained business initiative by building upon the decision to keep the company whole, IBM unleashed a global services business that rapidly became a leading technology integrator and also invested heavily in software development. (DiCarlo, “How Lou Gerstner”) On later years IBM have struggled with declining revenues and only met profitability goals by cutting its operational costs. The weak revenue growth has affected the price-levels of the firms stock negatively. To maintain the price of its stock IBM has implemented several large-scale buyback plans reducing the numbers of shares outstanding, a strategy used to boost stock price in the short-term. The number of shares outstanding as of Q1 2015 was 988.42m, which could be contrasted with the 1.675bn shares outstanding as of Q2 2004 to emphasize the extent of the firms’ stock repurchases. As a result, the IBM stock has fluctuated steadily around its current price level of $180 over the last four years. This period was preceded by two years (2009-2011) where the stock price rose heavily from prices around $100, levels which it had fluctuated around since the early 2000’s. This synthetic way of controlling the stock

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