In an article on Forbes, Steve Denning explained some of the reasons why International Business Machines Corp. (NYSE:IBM) performed worst in 2014. He said that IBM has destroyed the shareholders’ value. Under the guise of long-term commitments and investments, International Business Machines Corp. (NYSE:IBM) is giving nothing back to its shareholders in terms of innovation, products and money. Denning said that IBM performed worst in Dow for the second consecutive year. The company lost 15% of the market cap in 2014.
The source quoted another article which has claimed that this worst performance by International Business Machines Corp. (NYSE:IBM) was already expected as the company was confused in product strategy, investments and products. This all has contributed to the horrendous results. International Business Machines Corp. (NYSE:IBM)’s CEO Ginni Rometty messed up the strategy and could not balance between the R&D and share price sustenance rates. Denning thinks that a company could not maintain both a share price and big investments in research.
Cloud is the second biggest reason for problems for International Business Machines Corp. (NYSE:IBM). The company counts around $4 billion of its revenue from Cloud. Denning said that relatively small players are beating International Business Machines Corp. (NYSE:IBM) in the Cloud sector. The company is trying to grow its business but so far, there has been no formidable success.
China and other emerging markets are not being given importance by International Business Machines Corp. (NYSE:IBM). Other companies are paving their ways to land the emerging markets in the coming years.
Denning mentioned a failed bid by International Business Machines Corp. (NYSE:IBM) for a CIA Cloud computing project in which the company bid for $600 million but got rejected on technical grounds.
As of June 30, 2014, Ken Fisher’s Fisher Asset Management owns over 18 million shares in Intel Corporation (NASDAQ:INTC).
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