IBM Shares Down 10% In Last Month

By Douglas A. McIntyre Updated Jan 12, 12:16PM EST · Published May 7, 7:05AM EDT

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IBM Shares Down 10% In Last Month — © Thinkstock

[cnxvideo id=”625456″ placement=”ros”]IBM’s (NYSE: IBM) shares continue to tumble in the wake of its weak earnings and news that Warren Buffett of Berkshire (NYSE: BRK-B) has sold off some of his shares. IBM stock has dropped 10% in the last month to $155. Shares in its two major rivals have risen over the same period.

Amazon (NASDAQ: AMZN) is generally considered the global market share leader in cloud computing, a sector in which IBM is desperate for success. Amazon’s shares are up nearly 4% in the last month to $934. Microsoft (NASDAQ: MSFT), another cloud leader has posted a 5% share improvement in the last month to $69. In addition, Microsoft and Amazon trade near their all time highs. In IBM’s case, its stock is not even close. Additionally, IBM’s market cap is $146 billion. Amazon’s is $446 billion, and Microsoft’s $532 billion.

Two things happened at IBM in the last quarter that Wall St. does not like. The first was poor financial performance. The other was an attempt by Ginni Rometty, IBM chairman, president and chief executive officer to make the numbers look better than they were.

IBM’s revenue for the period dropped 3.1% to $18.2 billion. Revenue among its strategic imperatives business, which IBM sales are essential to its future rose only 12% to $7.8 billion. Cloud revenue was up 33% to $3.5 billion. The cloud sector is exploding, so the IBM numbers are modest.

Rometty commented:

“In the first quarter, both the IBM Cloud and our cognitive solutions again grew strongly, which fueled robust performance in our strategic imperatives. In addition, we are developing and bringing to market emerging technologies such as blockchain and quantum, revolutionizing how enterprises will tackle complex business problems in the years ahead.”

This completely dodges the issue of overall revenue performance and earnings. Most importantly, it does not address how IBM will pull out of its many dilemmas

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.