IBM approves $4 billion stock buyback program

IBM also disclosed today that the U.S. Securities and Exchange Commission is investigating how IBM accounts for revenue recognition on its financial statements.

IBM's board of directors has just approved $4 billion for use in the company's stock buyback program, plus a quarterly cash dividend of $1.30 per common share.

The $4 billion is in addition to the $2.4 billion leftover from a $5 billion stock repurchase IBM approved a year ago.

IBM said it will repurchase the shares on the open market or in private transactions from time to time, depending on market conditions. IBM's share price dipped slightly immediately after the buyback was announced.

In a canned statement, IBM CEO Ginni Rometty touted the dividends and share repurchases as beneficial to shareholders.

"We are committed to a higher value strategy fueled by innovation and a shift to new growth opportunities," Rometty said. "We manage the business for the long term and will continue to return significant value to shareholders through dividends and share repurchases."

The general consensus on Twitter, however, was far more skeptical.

IBM already doled out $1.5 billion for buybacks during its recently reported fiscal third quarter. The mixed results and 2015 guidance cut prompted IBM shares to dip to a five-year low last week.

IBM is banking on new business units such as cognitive computing and its more established cloud portfolio to increase revenue in the long term. The growth of those units will be essential for IBM to offset its sluggish hardware, software and services units.

Speaking of revenue, IBM disclosed today that the U.S. Securities and Exchange Commission is investigating how IBM accounts for revenue recognition on its financial statements.

As a result of the disclosure, IBM's shares dropped another 3 percent.

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