Buffett Sells IBM

Can IBM reinvent itself as it has done in the past?

Warren Buffett has sold about one third of his IBM shares. His investment company Berkshire Hathaway has sold off about 30 million shares out of approximately 80 million shares owned  of IBM so far this year.

International Business Machines (IBM) is down about $3.50 a share today. IBM is trading at $155 per share. IBM was trading at just below $215 per share back in 2013, losing over 25% of its value since that time.

“I don’t value IBM the same way that I did 6 years ago when I started buying,” he tells CNBC. “I’ve revalued it somewhat downward … When it got above $180 we actually sold a reasonable amount of stock.”

Can IBM reinvent itself as it has done in the past? Maybe but I don’t believe it is possible under current leadership. While the name is attractive – the stock is not.

Thoughts or comments are welcome!

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Verizon is Buying the S&P 500!

“What is the truth and what is rumor ?”

Almost everyone, except possibly the Verizon (VZ) CEO and its Board of Directors, can see that Verizon has been pinned into a corner by the recent moves of T-Mobile (TMUS) and the brilliant acquisitions of AT&T (T). T-Mobile’s move to merge with Sprint ( S) and its aggressive campaign for wireless customers have taken a toll on Verizon. Add to the mix recent moves by AT&T to acquire Direct TV, Time Warner and Straight Path Communications and Verizon seems to be having a melt down.

At least this seems to be the case if you believe half the rumors that are surfacing on Wall Street. Most investors, including myself, have been confused about Verizon’s announced acquisitions of AOL and Yahoo. Neither of which added a lot of  value for Verizon in comparison with the cost (this investors opinion)

Now the latest rumors making their way around Wall Street are that Verizon will attempt to outbid AT&T for Straight path Communications for its prized spectrum. This was later denied by Verizon’s CEO as he stated that Verizon had all the spectrum they needed for its 5-G roll out. Then the CEO announced that Verizon would be open to being acquired by a major entertainment entity like Disney (DIS) or Comcast (CMCSA). There has been no response, at least to my knowledge, from either Disney or Comcast but I have no doubt both are looking into the possibilities. Now it seems Verizon’s latest target has become Time Inc. (Time) ! This latest one makes no sense at all to me – what would Verizon want with a defunct magazine publishing dinosaur?

What is the truth and what is rumor ? I have no idea at this point but it seems Wall Street has a lot of time these days to spread rumors and gossip or perhaps it is well planned misdirection. If you believe the Wall Street rumor mill you would certainly come to the conclusion Verizon is looking to buy out the whole S&P 500 but of course that is just sarcasm. There is no doubt though , using a chess term the Verizon CEO has been checked, but he is not checkmated yet. He will have to make some serious moves to move his company into a position in which it can win the game again. Whatever the truth is I will continue to hold my position in Verizon for the time being, but you can bet I will be keeping a close eye on it!

Your thoughts or comments are welcome!