Have IBM's well-honed instincts for tapping the bond markets struck again? The company has...


Have IBM's well-honed instincts for tapping the bond markets struck again? The company has reportedly issued $1B of 10-year notes with a record-low coupon of 1.875%. "So lemme get this straight," writes Conor Sen, "I can lend money to IBM for 10 years at 1.875% or buy the stock yielding 1.78%?"
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Comments (8)
  • Stone Fox Capital
    , contributor
    Comments (9690) | Send Message
     
    and only one of the payments will increase over time.
    25 Jul 2012, 03:36 PM Reply Like
  • bbro
    , contributor
    Comments (11219) | Send Message
     
    Bingo,,,sshhh don't tell everybody....
    25 Jul 2012, 03:38 PM Reply Like
  • bbro
    , contributor
    Comments (11219) | Send Message
     
    Or IBM can issue bonds at 1.875 a year and buy its own stock....
    25 Jul 2012, 03:39 PM Reply Like
  • youngman442002
    , contributor
    Comments (5123) | Send Message
     
    a greater fool.....who is happy with a 1.875 return over 10 years...???
    25 Jul 2012, 03:40 PM Reply Like
  • bbro
    , contributor
    Comments (11219) | Send Message
     
    How about .50% for 5 years ???
    25 Jul 2012, 04:23 PM Reply Like
  • pensador
    , contributor
    Comments (6) | Send Message
     
    IBM thinking: borrow for 10 yrs @ 1.875 tax deductible, buy back my shares and pay the same yield as a dividend to my shareholders on less shares. How sweet!!!!. This is shareholder value at work!!!!
    25 Jul 2012, 03:56 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
     
    Unreal.
    25 Jul 2012, 04:25 PM Reply Like
  • bobhajicek@gmail.com
    , contributor
    Comments (2) | Send Message
     
    I worked for IBM for 12 years as a non-executive and am now retired. My previous work history was at an executive level in companies not in the technology industry. This experience enabled me to have a perspective of IBM and an appreciation of how this company has evolved from near disaster and returned to its historical prominence.
    In the early 1990's, Lou Gerstner saved the company from being sold off in pieces and pulled it out of a declining spiral creating a basis for future growth. The succeeding CEO, Sam Palmisano, built on Gerstner's model and made some brilliant moves in staging the company for several years of strong profitability and focusing on growing markets. The company created a five year plan to increase earning which it achieved. A second five year plan is now in place. Palmisano is now Chairman of the Board and has been succeeded by Ginny Romitty. IBM is extremely well managed by key executives responsible for IBM's various core businesses and Mark Loughridge, Senior Vice President and Chief Financial Officer. When the world finally resolves its economic and financial problems IBM is poised for something very special in future growth. I don't have stock movement charts and I am not a stock analyst but I do have an appreciation of what management can achieve with outstanding leadership. I own stock in IBM and will continue to hold it because for one, I believe the company's future is very bright.
    25 Jul 2012, 11:57 PM Reply Like
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