IBM Goes Big With $5 Billion Stock Buyback

by Tom Taulli | October 31, 2012 10:32 am

IBM Goes Big With $5 Billion Stock Buyback

IBMPromo IBM Goes Big With $5 Billion Stock Buyback[1]When IBM (NYSE:IBM[2]) reported its third-quarter earnings a couple weeks ago, the results were miserable. Since then, the shares are off almost 9%. Other mega techs like Intel (NASDAQ:INTC[3]) and Google (NASDAQ:GOOG[4]) also had similar moves.

Today, though, IBM provided some much-needed support when it announced[5] that it added $5 billion to its stock buyback program. In all, $11.7 billion are available for purchases, which represents about 5% of the outstanding shares.

Plus, IBM tends to follow-through on its buybacks. It purchased roughly $3 billion in stock for the past two quarters.

Still, this does not necessarily mean that the company will use up all the purchasing power. And while the $5 billion buyback plan is encouraging, it is still not enough. In early trading, IBM’s shares are up only about 0.5% to $194.32.

In other words, investors want to see some signs that the company is once again getting traction with revenue growth.

Tom Taulli runs the InvestorPlace blog IPOPlaybook[6], a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.[7]”  Follow him on Twitter at @ttaulli[8]. As of this writing, he did not hold a position in any of the aforementioned securities.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/08/IBMPromo.jpg
  2. IBM: http://studio-5.financialcontent.com/investplace/quote?Symbol=IBM
  3. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC
  4. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  5. announced: http://online.wsj.com/article/AP904f81a9150f4e88bb7746569322dd10.html
  6. IPOPlaybook: http://investorplace.com/ipo-playbook/
  7. How to Create the Next Facebook.: http://www.amazon.com/gp/product/1430246472/ref=s9_simh_gw_p14_d0_i1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-3&pf_rd_r=0GRB6ZMCTYDZVNG7Q7NV&pf_rd_t=101&pf_rd_p=470938811&pf_rd_i=507846
  8. @ttaulli: https://twitter.com/ttaulli

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