Who Wins in IBM Stock Buyback?
By John Geralds in Silicon Valley SAN JOSE, Nov. 13, 1998 – Yesterday, IBM’s stock price closed at an all-time high of $159.43. The price has been moving up steadily since it hit its low for the last 12 months of $95.25, early this year. One would think that such investor confidence rewarded IBM for a sterling performance in its markets, with turnover and profits roaring along on a par with the stock price. One would be wrong. IBM’s stock price continues to defy gravity despite the fact that, during Lou Gerstner’s five-year term as chief executive, sales and profits have annually averaged single percentage point rises. Why does the success of the stock bear little resemblance to the financial performance of the company? One vocal critic of Gerstner and a long time IBM watcher, Bob Djurdjevic, believes the rise in the price has nothing to do with the company’s performance but is the result of an “unspoken” deal between the company chairman and Wall Street that earns both sides pots of m
