With the caveat that I work for IBM but have no inside knowledge about anything important, it doesn't seem very bad to me? Overall profit is going to be down a tiny amount below expectations.
Sure, but a prediction made 3 months ago turns out to be short by a few percent at most, and that leads to a 25%+ drop in the share price? That seems weird to me.
What if the market expected 25% more then reported ? Nobody "knows" what the market expects. People infer it by looking at forward valuation, company guidance, investor expectations, and many many other things happening in the world, in competition, in the value chain. And of course the market does its thing and figures that this company has x% chance of beating (or missing) by $y, and when it's wrong the moves can be huge.
Especially when the expectations are informed by the company’s own guidance about what to expect and they are wrong. It means they missed their own predictions which doesn’t engender confidence.
Depends what happens next. RSUs are taxed as ordinary income at their market value at the time they vest, so it's not necessarily bad if the stock is down.
In fact, the ideal scenario is that the price drops just before your vest and then bounces back up after.
Worst day, so far* ;-)
The press release: https://newsroom.ibm.com/2026-07-14-Arvind-Krishnas-Letter-t...
With the caveat that I work for IBM but have no inside knowledge about anything important, it doesn't seem very bad to me? Overall profit is going to be down a tiny amount below expectations.
Well, the answer is in your question, it's all about expectations ; the market wanted more, didn't get it, and re-rates.
Sure, but a prediction made 3 months ago turns out to be short by a few percent at most, and that leads to a 25%+ drop in the share price? That seems weird to me.
What if the market expected 25% more then reported ? Nobody "knows" what the market expects. People infer it by looking at forward valuation, company guidance, investor expectations, and many many other things happening in the world, in competition, in the value chain. And of course the market does its thing and figures that this company has x% chance of beating (or missing) by $y, and when it's wrong the moves can be huge.
Especially when the expectations are informed by the company’s own guidance about what to expect and they are wrong. It means they missed their own predictions which doesn’t engender confidence.
This was great timing for IBM employees with RSU's. Many folks had RSUs which literally unlocked this morning.
Great meaning bad?
Depends what happens next. RSUs are taxed as ordinary income at their market value at the time they vest, so it's not necessarily bad if the stock is down.
In fact, the ideal scenario is that the price drops just before your vest and then bounces back up after.
> IBM Stock has worst day
(so far)