IBM Prepares Defence Against Disgruntled Shareholders
After 11 consecutive quarters of revenue decline, shareholders turn to activist investors for shake things up at IBM
Disgruntled IBM shareholders fed up with constant falling revenues were reportedly unsuccessful in attempts to seek advice from activist investors in the company.
The shareholders in question hoped to ruffle a few feathers by turning to Bill Ackman’s Pershing Square and Jeffrey Ubben’s ValueAct for help, but both firms spurned the advances, according to Reuters.
Both Pershing Square and ValueAct took a look at IBM, but declined to act because they felt the problems at IBM were not easily fixable, according to Reuters’ sources.
Despite the failure of the disgruntled shareholders to rally support, IBM is now creating a defence strategy to protect itself from activist hedge funders.
This includes working with two investment banks
Strategy
“IBM is continuing to execute on our strategy – making investments in growth areas such as analytics and cloud, reinventing our core franchises, and returning capital to shareholders. We are managing the company for the long term,” the company is quoted as saying.
The sources also pointed out some investors think CEO Gini Rometty is actually doing a good job in trying to turn the company around, and is not in fact ‘underperforming’ – something that activists look for when planning to move on a company.
