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A News Report from the IBM Annual Meeting

Additional Stock Buybacks Authorized

Also, a "Poughkeepsie Journal" Story That Is Setting Off All Sorts of Bells Ringing

PHOENIX, Apr. 30 - the IBM Board approved another $3.5 billion for stock buybacks at the IBM Annual Meeting this morning. No surprise there, although some investors were hoping that Sam Palmisano would turn a new leaf. "I am not sure that Sam has it in him to make the radical changes that are necessary," we wrote to one of them before the IBM meeting.

This assessment echoed what we said in an Annex Bulletin back in January, when Lou Gerstner announced he was leaving:

"Is Palmisano likely to carry out some badly needed radical reforms at IBM? (such as break it up - see "Break Up IBM!", March 1996, and "What's IBM Really Worth?", Forbes, Nov. 2000).

Don’t hold your breath for it. If Palmisano were not always "politically correct," he would not be ascending to the Big Blue throne right now. He’d be were all other "radical thinkers" in Gerstner’s Armonk ended up - out in the street. And since Gerstner is going to be looking over Palmisano’s shoulders till the end of the year, it is unlikely that the new CEO would try to make some radical changes, even if he had had it in him (which is a big IF!).

So stand by for IBM coasting and Palmisano treading water this year."

For the full Annex Bulletin, click here

Separately, thought you may be interested in the following excerpt from a Poughkeepsie Journal story about our five-year IBM forecast:

Tuesday, April 30, 2001

IBM slide to continue, analysts say

By Craig Wolf

Poughkeepsie Journal

Big Blue's future looks a little smaller than its past, says a veteran analyst, who predicted Monday revenues will slide for years.

On the eve of IBM Corp.'s annual shareholder meeting, Robert Djurdjevic, president of Annex Research in Phoenix, issued his annual forecast, and it was not pretty.

''Unless something pretty radical happens pretty soon, from now on, Big Blue is in for a downhill slide eventually into oblivion,'' Djurdjevic wrote. ''Five years from now, IBM will be a considerably smaller company making a lot less money than today.''

Djurdjevic expects overall IBM revenue to decline at a compound annual rate of 7 percent over five years.


To read the full Poughkeepsie Journal story, click here.

The above story seems to be setting off all sorts of bells ringing in the New York area. The producer of the longest-running financial radio talk show in the country has just invited yours truly to be the guest after receiving many calls from listeners who had read the Poughkeepsie Journal story.

For additional media articles on IBM and other topics, click here

Happy bargain hunting!

Bob Djurdjevic

[Also check out“Tough Times, Soft Deals,” (Apr. 25, 2002),  Industry Stratification Trend (Mar. 30, 1990),  “Gerstner’s Legacy: Good Manager, Poor Entrepreneur” (Jan. 2002),  IBM 5-year Forecast 2001: An Unenviable Legacy (June 2001), "Big Blue Starting to Unravel," (Apr. 8, 2002), SEC Launches Formal Probe of Wall Street Research (Apr. 25, 2002),  “SEC to Tighten Stock Option Rules” (Apr. 5, 2002), "Sir Lou OutLayed Lay!" (Apr. 1, 2002), "IBM Pension Fund Vapors," (Mar. 23, 2002), Is IBM Cheating on Taxes, Annex Bulletin 99-17 (May 1999),  Fortune on IBM (June 15, 2000), “Smoke and Mirrors Galore,” July 2000), Annex Bulletin 98-14 ("Wag the Big Blue Dog"), Armonk's Fudge Factory (Apr. 9, 1999)Where Armonk Meets Wall Street, Greed Breeds Incest (November 1998)Stock Buybacks Questioned: Is IBM Mortgaging Its Future Again?, 97-18 (4/29/97),  "Some Insiders Cashed In On IBM Stock's Rise, Buybacks" 97-22, 7/27/97,  Djurdjevic’s Forbes column, "Is Big Blue Back?," 6/10/97;  “Executive Suite: How Sweet!,” (July 1997), "Gerstner: Best Years Are Behind", Aug. 10, 1999), "IBM's Best Years Are 3-4 Decades Behind Us" (July 1999), "Lou's Lair vs. Bill's Loft" (June 1999),  "Corporate Cabbage Patch Dolls," 98-39, 10/31/98; Djurdjevic’s Chronicles magazine October 1998 column, "Wall Street Boom; Main Street Doom", “Louis XIX of Armonk,” (Aug. 1996) etc.].

Or just click on and use "financial engineering" as keywords.


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Volume XVIII, Annex Newsflash No. 2002-05
April 30, 2002

Editor: Bob Djurdjevic
Published by Annex Research

P.O. Box 97100, Phoenix, Arizona 85060-7100
TEL/FAX: (602) 824-8111

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