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Dell Founder Dropped $100M Onto Red Hat

Posted by Hemos on from the what's-going-on-there dept.

diegocgteleline.es writes "Via google news, I found a article at MSNBC claiming that Michael Dell, Dell's founder and chairman, has droped $100M into Red Hat (Michael himself, not his company). Analyists say that "Dell - neither the person nor the company - is interested in acquiring Red Hat", but one wonders what's behind of this move. A fight against their competence in the server market?"

10 of 298 comments (clear)

  1. Dell UNIX by mrbill1234 · · Score: 5, Interesting

    Once upon a time, Dell had their own SVR4 UNIX Distro. Perhaps Mr Dell has a passion for OS's.

  2. Ok by Anonymous Coward · · Score: 5, Funny

    Dell - neither the person nor the company

    Aha

  3. linguistic note by greenguy · · Score: 5, Informative

    "Competence" = competition

    In Spanish, competencia means both, hence this is an easy error for native Spanish speakers to make in English.

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    1. Re:linguistic note by diegocgteleline.es · · Score: 5, Funny

      It was me who submitted that. Sorry, I assumed Slashdot editors read what and correct things before publishing them...how stupid I've been

  4. motivations. by Vellmont · · Score: 5, Insightful


    but one wonders what's behind of this move.
    With a 100 million investment by an individual (and not a corporation) you can bet that Michael Dell thinks this is a good investment. That kind of money isn't chump change, so he must think it's a good risk.

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  5. He can afford it by Silver+Sloth · · Score: 5, Insightful

    If I had Dell's capital I might invest a few bucks in an up-and-coming tech stock like RH. It might prove very useful given that Dell have some interest in the cheepo server market.

    I'm not saying this points to some massive change in direction, just a little future proofing, and if it all goes wrong he can afford it.

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  6. BFD by sysadmn · · Score: 5, Informative
    Conspiracy theorists should read the article. (Oops, this is Slashdot...) Dell's investment management firm bought $99.5MM dollars of debentures out of $600MM offered. Red Hat's market cap is about $2 billion. On top of that, the debentures are convertible to stock at a rate that would give Dell about $42MM worth of stock. It's hard to control a company when you own 2% of the stock.
    Even then, Dell might make money on the deal:
    That's because MSD could have bought Red Hat's debentures using a strategy called "convertible arbitrage," wherein an investment firm buys convertible debt in one bet while short selling the company's common stock at the same time.
    .
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  7. Nothing funny here by DenDave · · Score: 5, Informative

    Actually at the time MSD procured the shares it made a lot of sense. ES3 was set to turn a massive userbase into a load of paying users. It was everyone's ecpectation that a significant portion of professional non-paying RedHat Linux 9 users would convert their systems to the paying model. At the time the expectation was that RedHat would thus generate a healthy amount of liquidity and that is always good for share prices. The market didn't quite play out that way but that is of course with hindsight. MSD's decision was a rational investment. Getting Michael Dell a say in the shareholders meeting is of course the priviledge of wealth and there can be no doubt that Dell's views on the market are not without audience in Raleigh. For MSD to diversify his investements is just sound financial management, I mean would you hedge your entire financial future on Dell Computer?? ;)

    speculation of Michael dell actually buying RedHat is, on this information, totally unfounded.

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  8. Tomorrows headline: by FrothyBitter · · Score: 5, Funny

    Dell pre-installs Red Hat on all server machines to be sold.

    Friday's headline:

    Michael Dell sells shares in Red Hat for big profit.

  9. Re:Dell sucks until they offer an AMD by AKAImBatman · · Score: 5, Interesting

    Yeah, that was right around the time when Sun was getting in big trouble for cutting corners. They pretty much lost EBay because of it. Sun lost a lot of consumer trust during that period.

    These days I wouldn't buy from them, just because their financial situation is so bleak that there's no reason to believe that they'll still be in business in 1-2 years.

    1. They have 7 billion in the bank, and they're more or less breaking even. That's not *that* bleak.

    2. You have the hardware. It's a standard box with PC hardware. Who cares about whether Sun will be there or not?

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