IBM has a market capitalization of $118 billion
IBM Aims Low
Tuesday May 10, 2:10 pm ET
By Seth Jayson (TMF Bent)
IBM's (NYSE: IBM - News) recent struggles have been no secret. Last quarter's subpar earnings sent shares sliding, and recent fixes, like the planned layoffs in Europe and worldwide, won't address all the problems, like meager top-line growth.
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</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>The problem, of course, is how to get the growth back on track. It won't be simple. IBM is getting away from the lower-end hardware biz, which it somehow not only lost to upstarts like Dell (Nasdaq: DELL - News), but also actually managed to make unprofitable. The idea is to concentrate on the gravy from global services, which is the largest chunk of revenue, as well as the one growing most quickly these days.
Today's answer? More acquisitions. The firm recently agreed to buy a data-integration partner, Ascential Software (Nasdaq: ASCL - News), for $1 billion, and today, IBM announced that it would purchase Gluecode Technology, a small private firm that sells enterprise software solutions built on open-source software, including Apache Geronimo and Java. The press release says that the Gluecode systems will give IBM a foothold in the market for smaller businesses.
Unlike the Miss Haversham of software, Microsoft (Nasdaq: MSFT - News), IBM saw the writing on the wall long ago regarding the advantages of open-source software: Don't be too proud. Let the geeks out there work on the underlying IT infrastructures, and just sell software packages and specific know-how to businesses. This is why IBM has strengthened its partnerships with Red Hat (Nasdaq: RHAT - News), for instance.
Will this help IBM get more traction with smaller businesses? How much could it contribute to the top line? No idea. The bragging-rights section of Gluecode's website isn't exactly bristling with heavy-hitting clients, but if the $100 million price tag being reported today is true, it won't be much of a hardship for IBM if things fall through -- it probably spends that much on lunchroom Jell-O in a given year. Investors should take this away: IBM continues to make strategic moves toward future growth, and it has good balance sheets and more than enough free cash flow ($11 billion last year) to do what it takes. I may not have liked it near $100 a share, but at $73 and change, trading at multi-year lows in terms of price-to-earnings, enterprise value-to-sales, and enterprise value-to-EBITDA and free cash flow, value investors should be giving Big Blue a good, hard look.
IBM also had FCF of $2.7 billion. Let me know when you find a sportbook like that, then I'll be interested
IBM Aims Low
Tuesday May 10, 2:10 pm ET
By Seth Jayson (TMF Bent)
IBM's (NYSE: IBM - News) recent struggles have been no secret. Last quarter's subpar earnings sent shares sliding, and recent fixes, like the planned layoffs in Europe and worldwide, won't address all the problems, like meager top-line growth.
<TABLE cellSpacing=4 cellPadding=4 align=left border=0><TBODY><TR><TD><TABLE cellSpacing=0 cellPadding=0 border=0><TBODY><TR><TD align=middle>[size=-2]ADVERTISEMENT[/size]
</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>The problem, of course, is how to get the growth back on track. It won't be simple. IBM is getting away from the lower-end hardware biz, which it somehow not only lost to upstarts like Dell (Nasdaq: DELL - News), but also actually managed to make unprofitable. The idea is to concentrate on the gravy from global services, which is the largest chunk of revenue, as well as the one growing most quickly these days. Today's answer? More acquisitions. The firm recently agreed to buy a data-integration partner, Ascential Software (Nasdaq: ASCL - News), for $1 billion, and today, IBM announced that it would purchase Gluecode Technology, a small private firm that sells enterprise software solutions built on open-source software, including Apache Geronimo and Java. The press release says that the Gluecode systems will give IBM a foothold in the market for smaller businesses.
Unlike the Miss Haversham of software, Microsoft (Nasdaq: MSFT - News), IBM saw the writing on the wall long ago regarding the advantages of open-source software: Don't be too proud. Let the geeks out there work on the underlying IT infrastructures, and just sell software packages and specific know-how to businesses. This is why IBM has strengthened its partnerships with Red Hat (Nasdaq: RHAT - News), for instance.
Will this help IBM get more traction with smaller businesses? How much could it contribute to the top line? No idea. The bragging-rights section of Gluecode's website isn't exactly bristling with heavy-hitting clients, but if the $100 million price tag being reported today is true, it won't be much of a hardship for IBM if things fall through -- it probably spends that much on lunchroom Jell-O in a given year. Investors should take this away: IBM continues to make strategic moves toward future growth, and it has good balance sheets and more than enough free cash flow ($11 billion last year) to do what it takes. I may not have liked it near $100 a share, but at $73 and change, trading at multi-year lows in terms of price-to-earnings, enterprise value-to-sales, and enterprise value-to-EBITDA and free cash flow, value investors should be giving Big Blue a good, hard look.
IBM also had FCF of $2.7 billion. Let me know when you find a sportbook like that, then I'll be interested
Shrink ( Hypothetically) if you were contemplating starting an operation like this it would need to be in partnership with an established Insurance entity with deep pockets and the experience in the Marketing/Accounting/Fraud and Auditing expertise that Insurance Companies need.
This almost sounds like the kind of investment Warren Buffett would snap up in a few years!
IMHO
This almost sounds like the kind of investment Warren Buffett would snap up in a few years!
IMHO
yeah basically you would have the top dozen SB's vouching for each others safety via an insurance company.
1. Why would a top SB vouch for a competitor?
2. Why would a top SB increase the cost of getting a player and vouch for a competitor?
3. The creation of this insurance company would only make it easier for books to go under causing a cascading event: a)book goes under, b)insurance pays off claims c)insurance premiums rise d)rising premiums cause more books to close
BAD IDEA ALL THE WAY AROUND
1. Why would a top SB vouch for a competitor?
2. Why would a top SB increase the cost of getting a player and vouch for a competitor?
3. The creation of this insurance company would only make it easier for books to go under causing a cascading event: a)book goes under, b)insurance pays off claims c)insurance premiums rise d)rising premiums cause more books to close
BAD IDEA ALL THE WAY AROUND
buddyboy,
It would have only included who I beleive are the 8 strongest.
It would have only been as strong as the weakest link...
Much more downside than upside...
I don't think it was a bad idea because it did have the bettor's interest at heart and many other sports books would not have been allowed to advertise on it...
It's a rare thing these days to see a website turn away business...
THE SHRINK
It would have only included who I beleive are the 8 strongest.
It would have only been as strong as the weakest link...
Much more downside than upside...
I don't think it was a bad idea because it did have the bettor's interest at heart and many other sports books would not have been allowed to advertise on it...
It's a rare thing these days to see a website turn away business...
THE SHRINK
so sportsbooks "A","B","C","D","E","F","G" & "H" would guarantee the safety of each other.
In order for this Cartel to survive and be effective, sportsbooks "I" thru "Z" would NEVER get bailed out by books "A" thru "H" otherwise why have the alliance?
So who has the privilage of choosing the elite 8? It would just be a matter of time before books "I" thru "Z" would go under. why risk sending $$$ to a non-bailout book?
Then we would be left with just "the elite 8" safe books.
The elite 8 decide that 20 cent baseball is more profitable then 10 cent baseball. Don't like it? send your money to bill and bobs unsafe book with the 10 cent lines and 100%-no rollover bonus.
Down the road... one of the elite 8 decide to call it quits, the other 7 call foul about the bailouts... players get the shaft AGAIN....
no bailouts just won't work.
there has to be a pool of money managed by an outside party.
how do you get the pool of money? Charge premiums... who pays? the books pass the cost on to the players... ultimately every dollar taken in by the outside insurance company is one less dollar that can be wagered. (think of it as a trade inbalance)
anyway, one book goes under (or takes off) and this insurance company has to raise premiums to cover costs... the remaining books either pay up or cancel their policy.
in the end the risks far outway the rewards for the books.
Risks for the book:
1. increased costs per player
2. rising costs in the future due to the practices of others not in your control
3. what if the insurance company skips town with all the money?
4. tying your book together with 7 other books (guilt by association)
Rewards for the book
1. obtain more players
I'm sure these bookies can see a sucker bet
In order for this Cartel to survive and be effective, sportsbooks "I" thru "Z" would NEVER get bailed out by books "A" thru "H" otherwise why have the alliance?
So who has the privilage of choosing the elite 8? It would just be a matter of time before books "I" thru "Z" would go under. why risk sending $$$ to a non-bailout book?
Then we would be left with just "the elite 8" safe books.
The elite 8 decide that 20 cent baseball is more profitable then 10 cent baseball. Don't like it? send your money to bill and bobs unsafe book with the 10 cent lines and 100%-no rollover bonus.
Down the road... one of the elite 8 decide to call it quits, the other 7 call foul about the bailouts... players get the shaft AGAIN....
no bailouts just won't work.
there has to be a pool of money managed by an outside party.
how do you get the pool of money? Charge premiums... who pays? the books pass the cost on to the players... ultimately every dollar taken in by the outside insurance company is one less dollar that can be wagered. (think of it as a trade inbalance)
anyway, one book goes under (or takes off) and this insurance company has to raise premiums to cover costs... the remaining books either pay up or cancel their policy.
in the end the risks far outway the rewards for the books.
Risks for the book:
1. increased costs per player
2. rising costs in the future due to the practices of others not in your control
3. what if the insurance company skips town with all the money?
4. tying your book together with 7 other books (guilt by association)
Rewards for the book
1. obtain more players
I'm sure these bookies can see a sucker bet
buddyboy said:
Why? They exist now, with no insurance whatsoever. You're presuming demand for these alternate books would stop dead in its tracks, ignoring the fact that they may find news ways to compete.
Supply and demand dictate price. If price is manipulated absent dramatic changes in supply OR demand, one of the two will be affected. People do not HAVE to gamble. If it becomes insanely expensive to do so (and an additional 10 cents would be huge) then wouldn't people stop betting, or bet less? That eats into revenues, causing the prices to return to acceptable levels.
Also, you are presuming that price collusion would exist among the eight books. This might be true to a point, but if alternate books exist, or if entry into the market is still relatively unblocked, what long-term benefit would there be to a book to price themselves out of customers?
great even more reasons the insurance plan won't happen:
1) Books exist now, with no insurance whatsoever.
2) demand for alternate books (non insured books) would not stop
3) alternate books will just find new ways to compete.
4) Supply and demand dictate price (no reason to form cartel)
5) entry into the market by competitors will still be relatively unblocked
add this to:
6. increased costs per player (premiums)
7. rising premiums in the future due to the practices of SB's you can't control
8. Risk that the insurance company skips town with all the money
9. tying your book together with 7 other books (guilt by association)
all this to get more players????
1) Books exist now, with no insurance whatsoever.
2) demand for alternate books (non insured books) would not stop
3) alternate books will just find new ways to compete.
4) Supply and demand dictate price (no reason to form cartel)
5) entry into the market by competitors will still be relatively unblocked
add this to:
6. increased costs per player (premiums)
7. rising premiums in the future due to the practices of SB's you can't control
8. Risk that the insurance company skips town with all the money
9. tying your book together with 7 other books (guilt by association)
all this to get more players????
Like any other market in the history of markets, the gaming indusry will eventually break up into niches. One niche might see insurance as a competitive advantage, another might try transparency. Whatever.
But to slough off the idea of insurance simply because it isn't industry-wide is very nearsighted, imo.
The question is: would insurance increase demand enough to offset the costs/risks you outline? I personally think it would. And I'm basing this on my own hesitation (and the protests from friends and family about what I do) regarding depositing money into an entity against whom I had no recourse.
Fwiw, should the day ever come when offshore gambling is legal and therefore regulated, insurance will likely be a requirement to offer your book in the US.
But to slough off the idea of insurance simply because it isn't industry-wide is very nearsighted, imo.
The question is: would insurance increase demand enough to offset the costs/risks you outline? I personally think it would. And I'm basing this on my own hesitation (and the protests from friends and family about what I do) regarding depositing money into an entity against whom I had no recourse.
Fwiw, should the day ever come when offshore gambling is legal and therefore regulated, insurance will likely be a requirement to offer your book in the US.
