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- The plan has always been for IBM to distribute shares of Kyndryl to its shareholders in a tax-free transaction. We now know more about what that transaction will look like. IBM shareholders will receive at least 80.1% of Kyndryl's common stock when the spinoff is complete, with IBM retaining the remaining stake.
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One possible approach is to utilize the New York Stock Exchange closing price on November 4, 2021 (the first trading day immediately after the Distribution), for IBM common stock ($120.85 per share) and for Kyndryl common stock ($26.38 per share) as the fair market value.
- IBM Shareholders Will Become Kyndryl Shareholders
- Kyndryl Will Be A $19 Billion Behemoth in A Massive Industry
- Kyndryl Is Free Cash Flow Positive If You Make Some Adjustments
- IBM Will Be Smaller But Have Higher Margins
- IBM Will Be Focused on The Hybrid Cloud
The plan has always been for IBM to distribute shares of Kyndryl to its shareholders in a tax-free transaction. We now know more about what that transaction will look like. IBM shareholders will receive at least 80.1% of Kyndryl's common stock when the spinoff is complete, with IBM retaining the remaining stake. IBM plans to exchange its stake in K...
Kyndryl is already a major player in the realm of designing, building, managing, and modernizing mission-critical technology systems. The company has 4,000 customers in more than 100 countries, and it generated $19.4 billion of revenue in 2020. Kyndryl estimates that its current addressable market is $415 billion. That market is expected to grow by...
Measuring the profitability of a business that's still part of a larger parent company can be difficult. On an unadjusted basis, Kyndryl produced a pre-tax loss of $1.8 billion and a free cash flow loss of $0.3 billion in 2020. These numbers don't necessarily reflect how Kyndryl will perform once it's officially a stand-alone company. Among other t...
IBM is giving up around $19 billion of annual revenue by spinning off Kyndryl, but it's not giving up all that much free cash flow. IBM reported revenue of $73.6 billion and free cash flow of $10.8 billion in 2020. Excluding Kyndryl, revenue would have been $57.5 billion and free cash flow would have been around $10 billion. IBM will provide more d...
While Kyndryl has a large market opportunity, managed infrastructure services is a labor-intensive business. Kyndryl will have around 90,000 employees, so revenue per employee will be just over $200,000. That's lower than Walmart, for comparison. What remains of IBM will be less focused on low-margin services and more focused on high-margin softwar...
Story by Eric J. Savitz. • 22h • 2 min read. Kyndryl Earnings Top Estimates. The IBM Spinoff Gets Closer to Returning to Growth. © Provided by Barron's. Kyndryl Holdings, the IT services...
- Expect more revenue declines. Kyndryl's revenue declined 7% to $20.3 billion in 2019 and fell 5% to $19.4 billion in 2020. It ended 2020 with approximately 4,400 customers, down from 4,600 at the end of 2019.
- Expect lower gross margins. Kyndryl's gross margin expanded from 11.7% in 2018 to 12.8% in 2019, but declined to 11.4% in 2020 and contracted another 40 basis points year over year to 10.3% in the first half of 2021.
- Don't expect any profits. Kyndryl is also deeply unprofitable. It racked up net losses of $990 million in 2018, $943 million in 2019, and $2.01 billion in 2020, which included $918 million in pre-tax charges for layoffs and other "workforce rebalancing" measures.
- Expect lower dividends. Kyndryl's profitability and FCF might improve after it moves past all of its restructuring and spin-off charges, but it still probably won't generate much excess cash for buybacks or dividends.
Nov 4, 2021 · International Business Machines Corp. completed the spinoff of its $19 billion information technology services business on Wednesday, betting that independence will make it easier to reverse a...
Nov 4, 2021 · Kyndryl completed its spin-off from International Business Machines and has started trading as an independent company on the New York Stock Exchange under the ticker symbol KD. The New York-based company – the managed infrastructure services division of IBM’s global technology services unit – became an independent, publicly traded company ...
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