IBM Plunges 25% After $17.2 Billion Q2 Revenue Warning Triggers Fraud Probes
Updated
Updated · Trefis · Jul 15
IBM Plunges 25% After $17.2 Billion Q2 Revenue Warning Triggers Fraud Probes
3 articles · Updated · Trefis · Jul 15
Summary
IBM shares sank 25% in one session to $217.07 after the company said preliminary second-quarter revenue would be $17.2 billion, far below Wall Street's $17.86 billion estimate.
The warning came before Tuesday's open and sharply reversed upbeat sentiment around IBM, with the stock nearing an intraday low of $214.64 even as the S&P 500 rose 0.4%.
Multiple law firms then opened securities-fraud investigations, focusing on whether IBM's earlier messaging about Software and Infrastructure growth and business stability misled investors.
The miss was especially jarring because IBM had recently posted 9.7% annual revenue growth and a 15.6% net margin, leaving investors to reassess how much confidence to place in its guidance.