IBM Closes Acquisition of Red Hat for $34B

Post by asdf21 » Tue, Jul 09, 2019, 2:49 PM UTC

tontonius wrote: post #84

So IBM buys Red Hat for $34B, of which $20B are borrowed monies. The debt is priced at 1.05 percentage points above Treasury yield rate [1] which would be somewhere around 3.5% which puts interest on bond debt at ~$700m every year. Now consider that Red Hat had a net income of $433m. Even if they reach $500 this year, Big Blue will still be $200m short, every year. At the moment, IBM is trading down at -0.5% on an ot…

Post by logosmonkey » Tue, Jul 09, 2019, 2:52 PM UTC

duxup wrote: post #71

voidfunc wrote: post #27

This is a great move for both companies. The doom and gloom in this thread is depressing. RedHat gets access to IBMs massive sales machine and IBM picks up a number of key technologies. Win-win.

IBM has been stumbling around trying to find its feet again for a while now. It seems possible that despite the advantages you cite that IBM won't know how to use them. Word from the inside is that IBM's own "sales machine" selling Watson for what it really wasn't ... was a great deal of the problem with Watson. The skepticism about IBM is rooted in their recent history.

Post by trisiak » Tue, Jul 09, 2019, 2:54 PM UTC

jackhack wrote: post #75

bloopernova wrote: post #68

Earlier quoted context omitted.

I certainly don't want to argue or appear confrontational, but wanted to ask you this: Have there ever been any situations where the acquisition of a smaller company by a larger one has resulted in the smaller company remaining independent? Or has there been any positives for companies like Red Hat when they get bought? Usually I hear or read the positive-yet-bland press release talking about how wonderful this is, a…

I usually put it this way: "Name one company that was better after a merger." I've yet to find any affirmative answer. It's good to have hope, but it's not good to be unrealistic.

Post by roymurdock » Tue, Jul 09, 2019, 2:56 PM UTC

Post by topkai22 » Tue, Jul 09, 2019, 2:59 PM UTC

jackhack wrote: post #75

bloopernova wrote: post #68

Earlier quoted context omitted.

I certainly don't want to argue or appear confrontational, but wanted to ask you this: Have there ever been any situations where the acquisition of a smaller company by a larger one has resulted in the smaller company remaining independent? Or has there been any positives for companies like Red Hat when they get bought? Usually I hear or read the positive-yet-bland press release talking about how wonderful this is, a…

I usually put it this way: "Name one company that was better after a merger." I've yet to find any affirmative answer. It's good to have hope, but it's not good to be unrealistic.