The dumping of stock by IBM’s pension fund follows Warren buffet’s move to cut its stake in the company.
Usually where Warren Buffet goes, investors follow and that is certainly the case when it comes to IBM stock.
At the start of the month, Warren Buffet’s Berkshire Hathaway announced that it was to dump a third of its massive stake in Big Blue. The shocking news pointed to IBM’s biggest shareholder seemingly having lost confidence in the company, with Mr Buffet telling CNBC:
“IBM is a big strong company, but they’ve got big strong competitors too.”
“I don’t value IBM the same way that I did six years ago when I started buying. . . I’ve revalued it somewhat downward,” he said.
Many expected a larger-scale downshift in investor interest in IBM following Mr Buffet’s move – an expectation which has seemingly come to pass.
In what could come as a huge embarrassment for IBM, it’s very own pension fund has also sold most of its shares in the company. IBM’s Retirement fund reportedly cut its holdings in IBM stock from 82,802 shares as of December 31, 2016 to just 12,451 shares as of March 31 of 2017.
While it is not unusual for a pension fund to sell shares, the selling off of stock is indicative once again of a loss in confidence when it comes to the future health of IBM. An argument can also be made that its also a loss of confidence in the tech sector in general, seeing as the pension fund also offloaded shares in Intel, Microsoft and Apple in Q1.
Although the dumping of stock by its very own pension fund is embarrassing and will do nothing for investor confidence, it could merely point to a shift in strategy for the retirement fund. However, for IBM, it will be hard to shake-off the embarrassment of both its biggest shareholder and own pension fund dumping stock.