Seeking Alpha

IBM offering £750M ($1.01B) in debt, opens up Watson to developers

  • IBM, no stranger to issuing low-yield corporate debt, is offering £750M worth of Dec. 2020 notes sporting an interest rate of just 2.75%.
  • With the company having just added $15B to its buyback program, there's a good chance some of the funds will be used to fund additional stock repurchases, which have been crucial to keeping EPS growth positive in the face of declining revenue.
  • IBM ended Q3 with $36.2B in debt, or $10.4B if one backs out its Global Financing division. Cash/equivalents totaled $10.2B.
  • Meanwhile, IBM has opened up its Watson supercomputer/artificial intelligence platform to 3rd-party developers. A developer toolkit and API is being provided, and Big Blue also plans to work with VCs to compel startups to write cloud-based apps for the platform. Retail, supply chain, and health management apps are already in the pipeline. (PR)
  • IBM is counting on Watson, which runs on its proprietary Power CPUs, to give a lift to a Power server business that saw a 38% Y/Y sales drop in Q3 thanks to nosediving UNIX server demand.
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