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To: Ramsey Su who wrote (66)	4/30/1996 2:05:00 AM
From: Ira Vine	of 121

I think that the other company who signed a billion dollar contract was Lucent. My understanding is that these are situations where IBM will be processing a lot of the functions these companies used to do for themselves. This area (which is the fastest growing for IBM) may be bigger than people imagined; few companies have organizations that can handle jobs of this size. I don't know where the price is heading, but as I've said in earlier posts IBM was at $145 when it was losing money and gross sales were 20% lower. Personally, I will wait for the second quarter report before I make a decision on buying more.

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To: john c. cona who wrote (69)	4/30/1996 11:54:00 PM
From: Katie Hickox	of 121

IBM announces today a $2.5 billion stock buyback and the stock drops 7/8th. I would have expected the market to have reacted positively and that IBM's stock price would have gone up today. If I was confident that IBM can really compete in the client/server, internet market then I could see IBM's stock price easily going to 150 /155. But, IBM is great at what it's always been superior at: mainframe, I/S outsourcing, services, AS/400s. If they could just prove themselves to be on the cutting edge of say, electronic commerce on the internet, or evolving Lotus Notes into a Lotus Intranet/Notes/data decisional program, again I could see IBM's stock up there. Right now I don't see that pioneering, market leader in the hot new tech areas where it really counts. So I don't see IBM's stock going beyond 130 this year and currently IBM's stock price could well dip into the 90's. Please take what I say with a grain of salt as I take a non-quant view of things. KH

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To: Katie Hickox who wrote (72)	5/1/1996 11:58:00 AM
From: olduser	of 121

Hi Katie, IBM has 568 million and change shares outstanding according to PC Quote today. That's a market cap of over $60 billion. Maybe $2.5 billion stock buyback is considered ho hum? Well, it is over 4%, though. As for who is going to really compete in client/server etc., who knows? Who can you say will grab a big chunk of it? Sun, the PC/WS/Server people, Intel through the former? Maybe Microsoft? I firmly believe though that IBM's end to end experience from PCs through mid-range to the mainframe in hardware and software and connectivity sure makes them the leading candidate to pick up solutions, services and computer/network restructuring like they did at Ameritech and LSI Logic. Like a billion other people, I work for a company whose main competitor is IBM. I may not like offering this opinion but still it's hard to knock IBM. Also, IBM does open up vast markets for others to compete in. There, how's that for vague? V

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To: Katie Hickox who wrote ()	5/2/1996 9:35:00 AM
From: Seeker2007	of 121

As of the last quarter (3/29/96) IBM had 544 million shares outstanding. There is still $1bn left from the previous authorized buy-back and an additional $2.5 billion has been authorized. If the stock price were to remain depressed and IBM pays an average of $110 per share then with the $3.5 bn they will be able to purchase an additional 31.8 million shares bringing the number of shares outstanding to ~512 million. With this float I think that IBM will easily earn $12/share this year (1996) excluding one time items. Note also that in 1994 IBM had ~600 million shares outstanding. I think that IBM services revenue is going to continue to grow at a good rate (31% 1996/1995 1st quarter comparison). Nobody is better positioned than IBM in that area. Just in the past 2-3 weeks they have announced major (multibillion) contracts with Lucent and Ameritech. I also like the 2-3 page advts that IBm and Lotus have been taken out daily in the WSJ and other papers. That said the technicals still look very poor so the stock could fall a bit. However, historically IBM hasn't always followed all the technical patterns. Standards disclaimers apply.

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To: Kuang-Fen Sun who wrote (76)	5/3/1996 11:30:00 PM
From: Katie Hickox	of 121

Welcome to the IBM thread: The general consensus amongst the visitors at this thread and especially amongst the ex-ibmer's is that IBM's stock is undervalued and is a good buy. Yesterday Lehman Brothers upgraded this stock to "buy" and issued a statement saying IBM is undervalued or something along those lines. I tend to have a more pessimistic viewpoint because I have firsthand experience of how IBM has difficulty making inroads into the PC market which includes both hardware and software, and because I remain unconvinced that they can compete effectively against Sun, HP, Compaq in the client-server server area and against Oracle, Microsoft in the client-server application area. A good test will be what happens with Lotus' Notes product and whether Notes will continue to make additional headway for marketshare as competition heats up from Internet competitors. Katie

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To: john c. cona who wrote (69)	5/6/1996 12:25:00 AM
From: Katie Hickox	of 121

See Sunday's NewYork Times Business Section article "What's a Blue Chip Worth? The Case for I.B.M. Stock" on page 3. The article calculates the P/E ratio at 9.04 taking into consideration Friday's closing price of $108.125 and notes that IBM's P/E ratio is far below the "15 that is the average for the established companies that largely make up the S&P 500." For example, Compaq's P/E is 11.51 and EDS's is 25.68. Noted also is the $6.4 billion held in cash at the end of March. Problems sited are the challenges IBM faces because "the company's gret size makes meaningful growth a challenge. With $72 billion in revenues in '95, a 10% revenue increase for IBM means adding sales larger than Microsoft's $6 billion in total revenues last year." Also sited is that IBM's revenues grew only 2.1% in '94, and 11% in '95. Most importantly, the article discussed "that if IBM's five most profitable businesses were broken out and valued like their competitors, the company would be trading at $180 a share." Look for tomorrow the price of IBM's stock to go up in the range of somewhere between 1/2 and 1 1/4 points. I'll be really surprised if it drops. Still, despite the lowest P/E ratio of any blue chip stock, the market is really looking for signs of growth above 10 to 15%. My take is that IBM's stock could still drop to the nineties but if it did, this would be a fabulous buying opportunity. Even at 108, it's still a good long-term investment especially if IBM ever breaks up into different companies. What's your opinion on IBM breaking up into the 5 most profitable companies? Where do you think Lotus Notes will go? Anyone? KH

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