Friday, June 14, 2002

IBM FROM AN INVESTOR'S POINT OF VIEW For anyone who believes the market is always rational and efficient Put aside the usual technology industry politics for a moment. Don't think Linux vs. Windows. Don't think server vs. mainframe. Don't think big vs. small. Don't think about IBM-The PC Company. Don't think about the IBM of the 50's through the 70's (boom times) or the IBM of the late 80's and early 90's (is it going under?). Think of the IBM of today - the largest provider of global technology products and services. In February the stock was at 120. Today it is around 75. The biggest news inside the company during that period was the departure of Louis Gerstner. It would be ridiculous to discount a company like IBM by almost 38% in four months over the departure of one person. It would also be somewhat of a slap in Sam Palmisano's face, too. Clearly, worldwide demand for technology has been impacted by the business cycle, the downside of the usual economic cycle and the uncertainty that world politics brings to any possible recovery. Still, 38% in four months translates to IBM dropping in value by $76 billion! This isn't Enron. This is IBM. It remains a company that is trusted by more members of the Global 2000 than any other provider of technology products. I'm not hyping IBM here. I'm simply pointing out that no matter how bad world conditions become, IBM stock on sale for $76 billion less than what it was at the beginning of the year might be quite a value. In August of 1993, when lots of people thought IBM might fail or be broken up, the stock traded down to $10 and change on a split-adjusted basis. Had you bought at that time and held to today's $75 range, you would have earned in excess of 25% per year on your investment - excluding dividends. That's after the recent 38% drop in the stock. That's after "the market" decides IBM is worth $76 billion less than it was worth 4 months ago. Does IBM appear to be in worse shape than in 1993? Certainly not? Does anyone really believe that Sun, HP, Dell and other global providers of technology products and know-how are going to destroy IBM? They didn't in 1993 at IBM's weakest point! IBM shares gain after analysts back plans. SAN FRANCISCO (Reuters) - Shares of International Business Machines Corp. (IBM.N) bucked the fall endured by many technology stocks on Thursday after analysts endorsed its plan to exit the hard disk drive business and how to account for that. By Reuters. [New York Times: Technology] 8:45:00 AM     Comments[]

WIRELESS FOR THE REST OF US Not everyone lives in San Francisco. Those who don't aren't concentrated in New York. Until the wireless companies provide a differentiated, compelling value in services and handsets to the masses, the wireless "boom" will remain more like a "bust." I don't plan to surf the web on a phone keypad. In Memphis, I may not be able to truly surf the web on a handheld with reasonable economics for quite some time. Though many cell phones are dirt cheap, the latest phones (ostensibly ready) for the latest generation of wireless services cost quite a bit more. The monthly service is also above and beyond the calling plan. With a desire to combine cell calls, paging, messaging and PDA functionality, the buyer of a phone is faced with the march of Moore's Law. Ironically, consumers have become more accepting of its impact on their computers than they have on their cell phones. Further, more and more consumers are looking at their combined budget for cable or satellite television, home security fees, local phone lines, long distance, Internet access, web hosting and cell phone service. Plenty of people are ready for the company that can provide as many of these services as possible, on a family-oriented plan that permits a single bill and a single throat-to-choke when something goes wrong. Sprint Cuts Target for New Wireless Subscribers. OVERLAND PARK, (Reuters) - Long distance and wireless phone company Sprint Corp. (FON.N) on Thursday said subscriber growth in its wireless unit (PCS.N) would miss its target by up to 15 percent in part because of discounting by competitors. By Reuters. [New York Times: Technology] Please Avoid VoiceStream 7:57:04 AM     Comments[]

LEVEL 3 COMMUNICATIONS, INC. has signed quite a few of the KPNQwest customers and used the company's ON TAP provisioning capabilities to turn up new service quickly. KPN has also turned to Level 3 for new service on Level 3's network. KPN & Qwest were the original backers of KPNQwest. Neither company wanted to continue to invest in KPNQwest. KPNQwest's Ebone to shut at 4.45pm today. Exhausted volunteers say time is running out [The Register] 7:17:48 AM     Comments[]

© Copyright 2002 Steve Pilgrim.