IBM DROPS LIKE A ROCK
October 17, 2013 Leave a comment
One day after reporting disappointing third quarter results, the IBM stock dropped like a rock. As we write this, it is down nearly 13 points. Which means that more than $11 billion of the company’s value has been wiped out literally overnight. And not just IBM’s. We said that the Big Blue rip tide would likely drag down today some of its other fellow-dinosaurs in the Dow Industrials index. Which is down 55 points right now despite the good news of the day – the reopening of the US government – countering the IBM disappointment.
In fact, this drop makes IBM Dow’s Worst Stock Year to Date.
No surprise there (see “IBM on Top: What Can We Expect?). IBM rose on hot Wall Street air. It got deflated when the reality of the third quarter results punctured the balloon of lofty expectations.
So Wall Street has only itself to blame. For, it refused to accept the reality of IBM’s slow-no growth business model (see Big Blue Feet of Clay). Over and over again. Until now. This writer’s empathy only goes to the gullible small investors who followed the bankers’ advice.
So it goes… greed begets trouble in the end.