How Will IBM (IBM) Stock React to the Closing of Its Server Business Sale to Lenovo?

NEW YORK (TheStreet) -- IBM Corp. (IBM) and Lenovo Group Ltd. (LNVGY) are set to close their deal regarding Lenovo's acquisition of IBM's x86 server business this week, the two companies announced today.

Closing of the transaction will begin on Wednesday Oct. 1 and Lenovo will pay $2.1 billion for IMB's x86 server business, making Lenovo the "third largest player" in the global x86 server market, the companies said.

When the deal is finalized, IBM will have sold one of its less profitable businesses, allowing the company to focus on cloud computing and data analytics, Bloomberg reports.

Watch the video below for more on Lenovo's purchase of IBM's server business:

Shares of IBM are lower by 0.58% to $188.95 in mid-morning trading on Monday.

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Separately, TheStreet Ratings team rates INTL BUSINESS MACHINES CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTL BUSINESS MACHINES CORP (IBM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

You can view the full analysis from the report here: IBM Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

 

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