Archive for the ‘IBM’ Tag

Why IBM Is Paying $1.5 Billion To Lose A Business   2 comments

UNITED KINGDOM - MAY 21:  The IBM 'Power6' chip displayed at a product launch in central London, U.K., Monday, May 21, 2007. IBM introduced servers with its Power6 processor, a chip that lets users boost computer performance or reduce energy use, stepping up competition with Hewlett-Packard Co. and Sun Microsystems Inc.  (Photo by Graham Barclay/Bloomberg via Getty Images)

Link: http://www.marketplace.org/topics/business/why-ibm-paying-15-billion-lose-business

Summary: IBM has fell 7 percent off its stock price this week. IBM is selling its chip making company to GlobalFoundries for $1.5 billion over the next three years. It would sound unconventional, except when looking to the future. IBM will be receiving chips for the next ten years from GlobalFoundries. Deals like this are exceedingly rare, but IBM has realized truth: it would be more costly to shut down than to sell, and they may be saving money in the end.

Original Air Date: October 20, 2014

Length: 2 minutes 22 seconds

Prompt / Discussion: Discuss how this type of deal differs from collusion.