Federal investigation expands

Friday, June 6, 2003 | 10:09 a.m.

NEW YORK -- Shares of International Business Machines Corp., the world's largest computer maker, may come under pressure after Business Week reported a formal federal probe has expanded beyond the company's electronic cash-register unit, investors said.

IBM said Monday the U.S. Securities and Exchange Commission is seeking details on how the Armonk, N.Y.-based company booked 2000 and 2001 sales. IBM said then it believed the investigation stemmed from a separate probe of a customer of IBM's Retail Store Solutions unit. IBM spokesman Joe Stunkard declined to comment on the Business Week report.

"It will put added pressure on the stock," said Adam Friedman, who helps manage $16 billion at National City Corp., owner of 2.7 million IBM shares.

The investigation comes as IBM, also the biggest provider of computer services, is trying to lure new customers amid a two-year decline in corporate spending on computer-related technology and services. Investors said they're concerned about how extensive the investigation may be.

archive