IBM’s stock surges after plan to spin off managed infrastructure services unit

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Shares of International Business Machines Corp. shot up 4.4% in premarket trading Thursday, after the technology company said it will separate its managed infrastructure services unit of its Global Technology Services division into a new public company (NewCo). The separation is expected to be completed through a tax-free spinoff to IBM shareholders by the end of 2021. The move is part of IBM’s plan to accelerate its hybrid cloud growth strategy. “Now is the right time to create two market-leading companies focused on what they do best,” said Chief Executive Arvind Krishna. “IBM will focus on its open hybrid cloud platform and AI capabilities. NewCo will have greater agility to design, run and modernize the infrastructure of the world’s most important organizations.” IBM’s stock has lost 7.4% year to date, while the Dow Jones Industrial Average has slipped 0.8%.
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