Feeds

Lenovo stock falls as IBM retreats

Falling market share

  • alert
  • submit to reddit

The Power of One Brief: Top reasons to choose HP BladeSystem

Lenovo saw shares fall more than five per cent today following a sale of the PC maker's shares.

JP Morgan analysts downgraded the company to neutral from overweight, citing sluggish revenue growth from weak customer demand in China and the US.

The downgrade came after IBM yesterday sold off 116.19 million shares worth $77.3m at HK$5.19 each - about a 1.3 per cent stake in Lenovo, according to a Reuters report.

This is IBM's latest stake sell-off. In April, it sold $83.6m worth of Lenovo shares at HK$5.61 each.

The company acquired its stake in Lenovo at HK$2.675 a share in 2005 after the Chinese firm bought its struggling PC unit for $1.25bn and the assumption of debt. Since then the US tech giant has gradually sold tranches as lock-up periods have expired.

In a 2004 US Securities and Exchange Commission filing in late 2004, IBM that its ailing PC biz had seen “a history of recurring losses, negative working capital and an accumulated deficit," it said. "The ability to settle obligations as they come due is dependent on IBM funding the operations on an ongoing basis."

Lenovo was effectively saddled with a business that had suffered nearly $1bn in losses in the three years leading up to the acquisition in 2005.

Shares in Lenovo were set to open at HK$5.3 today, compared with a previous close of HK$5.58. ®

Application security programs and practises

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.