IBM shares reached their highest level in nine years on Tuesday when the company announced plans to buy back up to $3.5 billion in stock. Some analysts believe IBM has made the decision to use cash that had been reserved for an acquisition that fell through - Bay Networks and Netscape being the names most mentioned on Wall Street. Most investors, however, welcomed the move, which is likely to boost share prices even further.
"It's a vote of confidence by management that the share price is inexpensive," said Phil Shettewi, managing partner at investment firm Loomis, Sayles & Co. IBM shares rose 1 5/8 to 159 1/4 on Tuesday, but a buyback should boost the price higher by instilling confidence in the market, and by reducing the number of shares outstanding, so increasing their attractiveness to buyers.
The buyback is the second this year and authorises IBM to buy about 22 million shares at current prices - about four per cent of the total outstanding.
Cotton seedling freezes to death as Chang'e-4 shuts down for the Moon's 14-day lunar night
Fortnite easily out-earns PUBG, Assassin's Creed Odyssey and Red Dead Redemption 2 in 2018
Meteor showers as a service will be visible for about 100 kilometres in all directions
Saturn's rings only formed in the past 100 million years, suggests analysis of Cassini space probe data
New findings contradict conventional belief that Saturn's rings were formed along with the planet about 4.5 billion years ago