International Business Machines Corp. (IBM) Purchases UStreamF or Around $130M


Shares of International Business Machines Corp. (NYSE:IBM) are trading higher today after news emerged that the company has acquired the live video platform, UStream in a deal which is said to be worth approximately $130 million. Basically, a YouTube for live streaming video, UStream has grown significantly over the years, but hasn’t been able to turn any kind of major profit.

International Business Machines’ (NYSE:IBM) acquisition will give the company further ammunition in its drive to create a profitable and powerful cloud video services unit. This unit will now include UStream, Clearleap, Cleversafe and Aspera, which are all companies acquired by IBM over the the last few years.

“IBM doesn’t shoot from the hip. One of the things we were impressed with when we started engaging with IBM [last Fall] was there was a big master plan behind this acquisition. Sometimes companies make purchases in reaction to a move by a competitor. That was clearly not case here. This was a well thought out plan to incorporate video into a [cohesive] cloud unit,” Braxton Jarratt, the head of IBM’s new Cloud Video Services unit told TechCrunch.The stock is up 1.86% or $2.27 following the news, hitting $124.13 per share. About 3.56 million shares traded hands. IBM has declined 26.96% since June 16, 2015 and is downtrending. It has underperformed the S&P500 by 18.09%.

From a total of 17 analysts covering International Business Machines (NYSE:IBM) stock, 4 rate it a “Buy”, 3 a “Sell”, and 10 a “Hold”. This means that 24% of the ratings are positive. The highest target price is $178 while the lowest target price is $125. The mean of all analyst targets is $151.33 which is 21.91% above today’s ($124.13) stock price. International Business Machines was the topic of 29 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. RBC Capital Markets maintained shares on January 15 with a “Sector Perform” rating. Barclays Capital initiated shares with a”Underweight” rating and a $146 target share price in their report from an October 14. JMP Securities initiated IBM stock in a recent report from November 20 with a “Market Perform” rating. Argus Research upgraded the rating on August 26. Argus Research has a “Buy” rating and a $175 price target on shares. Finally, S&P Research maintained the stock with a “Buy” rating in a report they issued on an October 21.

The institutional sentiment increased to 0.81 in Q2 2015. It’s up 0.04, from 0.77 in 2015Q2. The ratio increased, as 91 funds sold all their International Business Machines Corp. shares they owned while 707 reduced their positions. 81 funds bought stakes while 569 increased their total positions. Institutions now own 562.90 million shares which is 1.71% more than the previous share count of 553.42 million in 2015Q2.

Fairfax Financial Holdings Ltd Can holds 18.27% of its total portfolio in International Business Machines Corp., equating to 1.36 million shares. Shanda Payment Holdings Ltd. owns 87,600 shares representing 11.06% of their total US portfolio. Moreover, Berkshire Hathaway Inc has 9.22% of their total portfolio invested in the company, equating to 81.03 million shares. The Japan-based Hikari Power Ltd has a total of 7.9% of their portfolio invested in the stock. Torchmark Corp, a Texas-based fund reported 69,400 shares owned.

Since April 30, 2015, the stock had 0 insider purchases, and 7 selling transactions for a total of $6.71 million in net activity. Di Leo Allen Bruno V sold 18,500 shares worth $2.65M. Rosamilia Thomas W sold 2,700 shares worth $397,926. Van Kralingen Bridget A sold 2,850 shares worth $413,739. Rhodin Michael D. sold 3,000 shares worth $484,887. The insider Clementi Erich sold 5,400 shares worth $931,847.

International Business Machines Corporation is a technology company. The company has a market cap of $120.43 billion. The Firm operates in five business divisions: Global Technology Services , which includes Strategic Outsourcing, Integrated Technology Services, Cloud and Technology Support Services, and also provides information technology (IT) infrastructure and business process services; Global Business Services (GBS), which offers its services across Consulting and Systems Integration, Global Process Services and Application Management Services; Software, which consists of middleware and operating systems software; Systems and Technology (STG), which provides infrastructure technologies, and Global Financing, which provides financing solutions for products or services that are critical to the end users’ business operations. It has 9.11 P/E ratio.