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Dell Going Private In $24.4 Billion Agreement
Nerval's Lobster writes "Dell is going private again, as the result of a $24.4 billion deal involving private-equity investors and Microsoft. The deal will close before the end of the second quarter of Dell's fiscal 2014, according to Reuters. Dell founder and namesake Michael Dell, who owns roughly 14 percent of the company's common shares, will continue to lead the newly privatized venture as Chairman and Chief Executive Officer. He will contribute his existing shares to the new company, on top of a 'substantial' additional cash investment. As with other hardware manufacturers in the space, Dell faces the specter of a softening PC market. And while Dell has made significant efforts to penetrate other markets—including the launch of a private cloud architecture based on the open-source OpenStack—that weakness has affected its bottom line: for its fiscal 2013 third quarter, the company reported an 11 percent decrease in revenue from the previous year; while it enjoyed an increase in revenue from its servers and services businesses, revenue from its Consumer division dipped 23 percent. Its Large Enterprise, Small and Medium Business, and Public revenue also declined." Another take at the New York Times.
Dudes, you are getting a Dell.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Give the money back to the shareholders!
No Linux support at all...
Time to support system 76 with my dollars.
What will be the result? Another dead company after they pump and dump it as a public company in a few years? Or a company worth a damm.
Gonna have to make some quality consumer products for that second option...
Smart money is on the first tho.
Good maybe, they can get back to providing a good service/product for reasonable prices and a modest profit rather than the 100% as much money as possible even at the expense of future profits model that the current corporate culture in the world seems to mandate as the norm.
So it is currently selling for 13.38 a share. Does this mean we could buy it now and make 27 cents a share when this deal goes through?
dude you are getting into the private club
Any deal with Microsoft in the title is destined for failure. Just ask Nokia how that's worked out for them so far.
Someone had to ask.
You may be right on the cost of Sarbanes Oxley compliance but I think your wrong about the cash.
IIRC, over half of the cash is being held overseas from un-repatriated foreign profits. As long as Dells’ overseas subsidiaries hold onto the cash they don’t have to pay corporate tax on it. The second it comes back they do.
This could be the best thing for Dell.
I'm no economist, but the limited exposure I've had to public companies is that nowadays, it's all about ONLY the next quarterly report.
The way the stock market is pushing things, you can't actually make good long term decisions for your company because the only thing that matters is short term stuff.
By buying back the stock, they're possibly giving themselves the opportunity to take control back and run the company in the best interests of long-term strategy/goals.
Good Luck Dell
The Digital Sorceress
Substitute Michael Dell for Sam Zell, and Dell Company for Tribune Company. Here lies the future...
Never trust guys with names that end in 'ell'
I Anonymous Coward predict that the consumer division will be sold to lenovo within 2 years. lenovo will drop desktops and focus on tablets etc.
What inflation?
Haven't ordered Dell machines for over 5 years now. HP gets all of our business.
While I didn't see this coming I knew Canonical's move with Dell was stupid. Dell is already too aligned with Microsoft and is only taking advantage of the situation for public relations reasons. Canonical would be better off teaming up with System76 or better yet ThinkPenguin. Companies who have an interest in the GNU/Linux market succeeding. Or dare I say start there own operations.
> I'm no economist, but
That's ok, they don't know what they're talking about either.
Rich And Stupid is not so bad as Working For Rich And Stupid.
You know, where the price of goods keeps going up in nominal terms; kind of like how a standard desktop PC used to be priced at $3,000 back in the early nineties and is now within spitting distance of $300.
Oh, wait, maybe this industry is different.
Dude, if you keep buying yourself you're gonna go BLIND!
C|N>K
Dell - the company and the person - are taking a very big gamble here. The company has been trying, mostly unsuccessfully, for the past several years to get a foothold in the service business. By most measures they have not done very well. Part of that probably stems from their terrible reputation in PC support in the consumer market. Perhaps they feel shackled by the PC business and quarterly reports and Sarbanes-Oxley, etc. And those are valid concerns.
But...Michael Dell is still going to be in charge. And they are going to have a lot of debt. And PC sales still make up a majority of their profits. In the short term it will probably mean lots of layoffs...particularly for people in the non-service sector of the company.
Cash always returns about zero percent. Inflation today is low – but interest rates on cash are somewhere around .1%. But even during normal times, interest on cash accounts are about the same as inflation. Basically, cash sits on the book with no economic impact.
The common wisdom is that it’s best to give excess cash back to the shareholders. If the shareholder (owner) wants they can reinvest it in dell – or they can decide what to do with it.
anyone think microsoft is taking a step to owning a hardware platform? uefi + comfortable share in a computer manufacturer theyve had lock-in status with for decades anyhow. All thats left is to dab a bit of solder on those CPU pins and theyre apple in a suit.
Good people go to bed earlier.
How is Dell already reporting is 2013 third quarter? Exactly what calendar dates are covered by that quarter?
The stock market seems to be full of dick heads and no talent people posing as analysts.
You switched to HP because Dell's order process was so frustrating and complex? Isn't that like switching to Chrysler because you thinks GM's "finish" quality looks cheap?
The truth is that all men having power ought to be mistrusted. James Madison
MS has a game console and a phone. Maybe now they are going to have their own actual consumer computer? Bet the other hardware retailers are gonna just love that...
I work for the Department of Redundancy Department.
Couldn't they just take 1/8 of the 24billion and start a new (private) company that competes with Dell for much less?
Dudes, you're getting a Dell (Inc)!
Dude, You're getting Dell!
Nokia has stopped with R&D, fired loads of staff and outsourced its production to cheap countries.
Its strengths were its serious R&D, the loyalty of its staff and its Scandinavian build quality.
You can ALWAYS turn a profit by slaughtering yourself, organs sell for a lot, just sell them off and you will be RICH! And dead. But RICH!
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Not to flame, but I'm done with them.
When it comes to big-box, I've been a big + trusted fan of Dell over the decades. They weren't bullet proof, but they were fairly solid. Unfortunately, my last 3 purchases from them have been... well... quite bad. And by bad, I don't mean "the drivers on their support page stunk" but "their choosing of custom hardware has stunk"
My big Dell tower: had a usb / SD module at the top that was shorting out. Replaced it, still shorting out. I didn't even have to get to Windows to have problems with it. I remove it, it's fine. OK, so no big deal... it was the equivalent of the appendix. The machine went more-or-less fine without it, though it took me a while to trace it down to that part. That part was annoying: as it was the last thing I thought of checking after video card, ram, hard drive, etc.
My next purchase was a laptop. Now here I wasn't going to fault them THAT much because it was a cheap cheap laptop. So this one I kind of blame on myself for buying garbage.
Now... recently, I bought an Alienware machine. It was great in concept: the X51 is a gaming machine. Not bleeding edge, but solid, in the form factor of an XBox. I figured: great, a solid development machine that can my a multimedia pc under my TV when it ages out. Unfortunately they included a custom-built lower-voltage nVidia 660 GTX that had a slew of problems that they're now trying to deny. At first the support guys stickied the post and were actively working with customers to find the cause of the issues. Once found, support unsticky-ed the post and started pushing it down by replying to other posts for no reason (pushing it onto 2nd/3rd page).
So, I'm done with them. Even if just anecdotal... 3 times in a row is enough to make me look elsewhere.
Currently at dell.com I see several machines for $369.
Don't expect much if the keep the same clown car full of managers they have now.
Their tech support is really good* - they pay attention to who their customers are. And even lately, when q/a seems to be down a bit, they're still good.
Most of you, you really want self-abuse, call Sun/Oracle "tech support". Maybe you'll get the engineer in Chile, like I did. Or the support for daytime by an engineer who *only* worked third shift.
As it is, their linux support's excellent, at least now.
mark
Good for Dell. Bad for Wall Street. By not looking beyond their noses, and caring only for short term bottom line, the Wall Street culture is going to either destroy companies by forcing them to focus on profits rather that quality, or make them run away and go private, like Dell is doing right now.
All those moments will be lost in time, like tears in rain... time... to... die...
This is delicious, DELL takes his own advice to Apple and gives the money back to the shareholders.
When one talks about affecting the bottom line, it is usually proper to quote Net Income, as it is the bottom line of the Income Statement. Revenue is the at the top, and while it may affect profit, if you have gains in your cost efficiencies, you might still be neutral on your Net Profit.
Microsoft is going to try and copy Apple in stealth mode.
The primary purpose of the deal is to repatriate a bunch of cash without having to pay corporate taxes on it. A lot of the money originally started in the US, but was hidden overseas. This brings it back. The shareholders all get a premium on the share price, giving them their cut. Dell borrows a bunch of money to pay the shareholders, then uses their offshore accounts to pay the banks back, because loan payments are tax-free. And since it's all capital gains, the shareholders are all paying less on it than you pay on your wages. It's how the 1% rolls - good for them, not so much for you.
You switched to HP because Dell's order process was so frustrating and complex? Isn't that like switching to Chrysler because you thinks GM's "finish" quality looks cheap?
It's more like switching to Ford because you're concerned with GM's design issues.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
No, I stand by my original comparison. I find the "fit and finish" of Chrysler products to be extremely cheap looking. I find the order process to place an order from HP to be extremely byzantine, generally I give up before I figure out whether they even offer the configuration I am looking for.
The truth is that all men having power ought to be mistrusted. James Madison
I stand by my original comparison. I find the "fit and finish" of Chrysler products to be extremely cheap looking.
All US automakers' fit and finish is beyond poor.
I find the order process to place an order from HP to be extremely byzantine, generally I give up before I figure out whether they even offer the configuration I am looking for.
Yeah, I stand by my comparison.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
by the Feds? It probably will be, thanks to lobbyists and bribes^H^H^H^H^H^Hcontributions... but how could it be?
A company with Microsoft's history of anti-competitive behavior, that commands a 90%+ market share in desktop operating systems, and nearly that in office suites, all while raking in monster revenues year after year, should NOT be allowed to have any interest in a PC hardware company, and certainly not one the size of Dell.
We see how other big corporate deals have "benefited" the customer and general public so much (i.e. they never do).... will the FTC and Justice Department and other regulatory bodies ever learn their lesson?