IBM and Red Hat – WTF is a Hybrid Cloud?

October 28. 2018. 6 mins read

In our last article on IBM’s activities in the area of blockchain, we talked about how difficult it is to find technology stocks for a dividend growth investing strategy. Why is that the case? It’s because technology stocks are largely growth stocks, and growth stocks can best serve investors by plowing all of their cash profits right back into the company so that it can get bigger and generate even more cash profits. That’s why technology stocks like Nvidia or Illumina don’t pay dividends. They have better uses for all that cash they’re printing – like making acquisitions with it. And that’s exactly what IBM has decided to do by paying almost $34 billion in cash (some of which was borrowed, as they only have ~11 billion on the books last we checked)  to acquire a publicly traded company called Red Hat (RHT).

As shareholders of IBM (IBM), we want someone to explain to us in laymen’s terms what this means for our future dividend streams. None of this complicated accounting mumbo-jumbo that you often read in those verbose Seeking

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