It now appears that IBM Corp’s campaign of three and four years ago to buy minority stakes in a large number of software and services companies was a Grand Old Duke of York strategy, and after agreeing to sell its 5% of Hogan Systems Inc back to Hogan (CI No 2,269), it is now reportedly ready to sell its stake in Policy Management Systems Corp. The Wall Street Journal suggests the move may reflect IBM’s need for cash more than a desire to shed a disappointing investment, but points out that in current market conditions, IBM would almost certainly record a loss on its investment in the Blythewood, South Carolina insurance software developer, where it paid $116.5m in 1989 for a 16% stake, and could expect to get no more than $90m for the stock now.Policy Management Systems still hasn’t released its second-quarter earnings report, which has been delayed because of the inquiry into the firm’s accounting practices.
