CA - IBM: Why The Fears Over Buying HashiCorp Are Overstated (Rating Upgrade)
2024-04-26 08:30:00 ET
Summary
- IBM stock has declined almost 17% from its March 2024 highs, firmly in correction territory.
- International Business Machines Corporation confirmed its acquisition of HashiCorp, paying a premium of nearly 43% over HCP's April 22 closing price.
- The Company expects the HCP deal to be accretive to adjusted EBITDA within the first full year.
- No dilution is expected as IBM funds the deal fully from its cash on hand.
- I explain why fears about the HCP deal are overstated, as the market reacted adversely.
IBM Falls On Fears Over HashiCorp Acquisition
International Business Machines Corporation ( IBM ) investors who attempted to defy gravity and didn't layer out (cut exposure) from their positions in March 2024 are likely hurting. IBM stock plunged toward the $165 zone this week after IBM released its first-quarter earnings release. International Business Machines Corporation also confirmed its acquisition of HashiCorp, Inc. ( HCP ), paying a nearly 43% premium over HCP's April 22 close. As a result, IBM has dropped almost 17% from its March 2024 highs, declining firmly into the correction zone....
IBM: Why The Fears Over Buying HashiCorp Are Overstated (Rating Upgrade)