Whenever a financial news channel talking head talks about the ‘decline’ or ‘fall’ or ‘end’ of a well-known corporate brand, it is advisable to remember Mark Twain’s famous quote on death. Twain said that the reports of his demise were greatly exaggerated. You really have to take negative analysis of ‘once great’ corporate giants on the skids with a grain of salt. At least, you should do so with IBM. Sure, IBM, the company that brought the PC to the world, seems like a completely different company now compared to its ‘glory days.’ After all, IBM is no longer in the PC business. It has sold off its PC business to China-based Lenovo. Instead, IBM is all about outsourced solutions, open source frameworks, and other high level tech services catering to some of the planet’s biggest enterprises.
IBM’s been lagging at the Dow
Compared to its Dow Jones Industrial Average brethren, IBM’s stock is not exactly the belle of the ball. In fact, some pundits say that Big Blue’s been dragging down the Dow due to its lackluster performance. They point to the fact that while other DJIA component stocks have been skyrocketing, IBM’s stock seems stock at the lower half of its 52-week high low spread. What gives? Well, the market might still need some time to adjust to the fact that IBM has restructured itself to follow tech’s transition. As you can well imagine, IBM has had to redefine and restructure itself several times so it can keep up with the pace of technological change and economic sea change. With the advent of cloud computing and Big Data, IBM has actually done a good job of seeing where trends are headed and reinventing itself. Far from a company that has ‘seen better days,’ IBM is actually fast mutating to meet future trends. Unfortunately, change is never pain-free nor is it free of anxiety. Expect the market to push IBM stock back up once the dust settles.