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Another day at the Stock Market

Tuesday, October 23, 2012

IBM and Siemens

Today, we are visiting two very different tech companies, IBM (IBM) and Siemens (SI). IBM, short for International Business Machines, is a company that focuses on IT infrastructure and business processes that was established in 1911. The company has grown to adapt with increasing technologies and is now headed by Virginia Rometty. Since public on the tech market, IBM has experience fairly steady growth and is now heading towards a promising future nearing all time highs of about $200. This initial view seems promising, and recent activity shows the same. Although it is somewhat unstable, it reaches almost $10 gains in just three days and takes significantly longer to lose stock value. In late September and early October, IBM has bought numerous companies: on September 24th, the company acquired a data analysis company called Butterfly Software; on October 1st, IBM also acquired Texas Memory Systems. Even more recently the company signed a cloud service contract with Kwality Dairy India, thus expanding its world reach and helping the shares grow. IBM is partnering with many new companies and signing fresh contracts that will help it grow and we advise to invest in the company. However, the Euro is currently experiencing worsening conditions and the market in every sector is unfortunately unstable. To further demonstrate the severity of the current status, we lost $77 over five shares of IBM in just one day of trading. We will try to analyze current market transitions on the world stock exchange and follow up with our readers quickly.
Our other company today is very different from IBM, and our other companies on the list: Siemens (SI). This is a very diverse company, with its hands in industry, healthcare, and energy technologies. Siemens was established in 1923 and is now headed by CEO Peter Loescher. Immediately when looking at stock prices, since 2001, the unstable market shows an outstanding lack of growth, surprising us - we expected such a multifarious tech company involved in so many industries to experience great growth. The 2008  recession - you can further read about this catastrophic event in the previous post, "2008 Global Recession: Where Did It Come From?" - took a huge toll on Siemens and the company consequently experienced nearly $100 in loss and has only recouped halfway since. Recent events are not providing a healthy outlook for Siemens, but rather raising eyebrows towards allegations of illegal acts. On September 24th, SI denied the claims that it had sold nuclear equipment  to Iran. This, as expected, had a slight downturn on the stocks of the company - who wants to invest in a company that supports anti-American activity? Granted, Siemens is a company that holds great control over nuclear energy, as seen with the TVO desire to buy $2.32 billion in its nuclear claims on October 1st. A week later, on October 8th, a new controversy sparked because of UK's desire to limit nuclear energy for environmental reasons. This brought a sustained decline in stock price. We advise against investing in the company without detailed research into the activities of the energy industry; also, the political issues surrounding Siemens and not allowing consistent growth in the company. We only lost $3.3 on the market today over ten shares and the market seems stable, but the state of the euro can harshly impede the growth of many companies, and a large part of such companies are suffering drastic losses.

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