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IBM Spinoff: 13 Things for Investors to Know

IBM (NYSE:IBM) has announced a spinoff of part of its business as it looks to shift its focus.

Sign of IBM on the office building

Source: Laborant / Shutterstock.com

Here’s what IBM investors need to know about the spinoff plans.

  • The company wants to spin off its Global Technology Services division into its own publicly-traded company.
  • Its goal in doing so is to shift the focus at IBM on cloud services.
  • The spinoff will be tax-free and the company expects it to take place before the end of 2021.
  • IBM notes that this will result in the majority of its revenue coming from cloud software and solutions.
  • Currently, a little more than half of the company’s revenue comes from its services business.
  • To go along with this, the company is looking to streamline its business.
  • That includes consolidating some of its divisions to create an optimized operating model.
  • IBM has yet to come up with a name for the new company that will be created by the spinoff.
  • Even so, it points out that it will be the leading managed infrastructure services provider upon its creation.
  • The new company will focus on maintaining and upgrading infrastructure systems for customers.
  • IBM notes that the spinoff will still have investors receiving their dividends.
  • It mentions that the combined dividends from each company won’t be lower than the current one offered by IBM.
  • After that initial dividend, it will be up to each company’s Board of Directors to decide on dividend payments.

IBM stock was up 5.7% as of Thursday afternoon.

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Article printed from InvestorPlace Media, https://investorplace.com/2020/10/ibm-spinoff-things-to-know/.

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