How deep a discount would you need to get before you spent $14.6 billion buying back shares in a single quarter? Now assume that most of that purchase was made with borrowed money. Again, how ridiculous a valuation mismatch would you require?

These aren't purely hypothetical questions. I just described exactly what IBM (NYSE:IBM) did in the just-reported second quarter. The company's board approved a $15 billion share repurchase program at the end of April, but such a large plan would normally take many months to complete -- even years. Yet Big Blue spent $12.5 billion on its own stock in May alone, leaving $400 million of that generous authorization.

If this isn't a clear signal that management believes in its strategy and opportunities, I don't know what is. You don't take on a few billion dollars of debt to buy back 6.3% of a $160 billion market cap without good reason. Regardless of the bravado radiating from Oracle (NASDAQ:ORCL) headquarters, for example, IBM says that its middleware solutions, including Oracle Fusion competitor WebSphere, are gaining market share.

Chairman and CEO Sam Palmisano says that his company is making "solid progress" toward meeting its long-term growth goals, thanks to a three-tined revenue expansion plan of acquisitions, emerging geographical markets, and service-oriented architecture (SOA) software platforms.

That explicit strategy lends even more support to Big Blue's confidence in its own products. If WebSphere wasn't a good enough SOA platform, that buyback money could have bought Tibco Software (NASDAQ:TIBX) and BEA Systems (NASDAQ:BEAS) at a 50% premium to their current market caps, with enough left over to snag database specialist Sybase (NYSE:SY) at the same generous premium, just for kicks.

But IBM's acquisitions have been leaning toward the small-cap end of the market lately, with no real blockbuster deals in the last few quarters. Its $1.6 billion FileNet acquisition is approaching its first anniversary in a few months. With this stock-focused spending spree in the rearview mirror, perhaps it's time for IBM to pursue another major acquisition or two. That's how they roll in upstate New York, after all.

Further blue-chip Foolishness:

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you wish, and Foolish disclosure won't leave you blue.

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