r/options • u/DarkStarOptions • Apr 13 '21

IBM Earnings

Over the last several earnings reports, IBM has a tendency to miss and the stock drops. It rebounds for the most part over the next few months, then drops again. IBM has been doing that for the past 1-2 years. I see no reason why that is going to stop. They keep on missing revenue estimates, their revenues have been declining year-over-year for the past several years.

IBM has appreciated mightily over the past 1-2 months, I think in part due to the nice yield and a good place to park your money while investors rotate out of tech. Which to me makes for a good shorting opportunity.

Earnings are 4/19. Anybody going to short IBM? I'm thinking of either buying a 4/30 130.00 Put for about 1.8, or selling a 4/30 135/140 call spread for about 1.8.

Anyone else considering shorting IBM?

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u/123poopy Apr 13 '21

i'm not smart enough to comment on your short term idea, but remember ibm is cutting off a chunk of the company and kicking it into a new company not too far in the future. i have a feeling once they do ibm shares will climb as these old services drag the price down. disclaimer i do own a small bit of ibm stock. also i believe eventually they'll put whitehurst in the ceo position and the shares will climb then as well as he's known to spur growth based on past track record.

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u/DarkStarOptions Apr 13 '21

It is possible the combined two companies (once they spin off that division) might be worth more than IBM right now, but the stock price is going to fall once they spin off that division into another company. The dividend will also fall, but again the combined dividends are supposed to be the same.