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Maneuvering Continues For Control of Dell
An anonymous reader writes "Just as Carl Icahn's months-long, high-profile bid for control of Dell seemed to have run its course, came the announcement that Dell's board had postponed a shareholder's vote on the bid from Michael Dell and investment firm Silver Lake Partners, to take private the company that Dell had started in a University of Texas dorm room twenty nine years ago. The postponement indicated that Dell was not confident that their $24.4 billion ($13.65 per share) deal had the necessary votes. Icahn and his main ally, Southeastern Asset Management, claim that the proposed deal undervalues the company and its upside potential; Icahn's latest proposal is to keep the company public, but to offer $14 per share plus upside warrants, for every share tendered by stockholders. The latest wrinkle is apparent tension within the Dell/Silver Lake team; Silver Lake reportedly feels entitled to the $450 million buyout fee specified in the deal's language, if any alternative bid from Icahn succeeds within a year; Dell and the board feel that Silver Lake would only be entitled to expenses in that case, perhaps amounting to a few tens of millions USD. The Bloomberg story also reports that Michael Dell has at times been unable to reach his Silver Lake counterpart (a longtime friend) on the phone to discuss possibly sweetening the bid."
I'd shut it down and give the money back to the shareholders.
I'd shut it down and give the money back to the shareholders.
Ironically this was from a time when Apple had failed while wintel had won. Leaving Jobs begging to Microsoft resulting in a settled lawsuit a few million in the bank...and a crippled office port. It only sounds stupid in retrospect because Apple from that dark time (A time I repeatedly point out its returning to), by reinventing itself, doing exciting things, leading in new markets. It became something different...better.
The World has changed since then Wintel are bleeding the PC industry dry with Microsoft & Intel cashing on on 70% gross profit margins...in the Desktop Apps(The Desktop destroyed by Microsoft...living on only in name...Windows) market that is not sustaining it...and Dells slice of the pie (and the Pie) is shrinking...The Days of Dell earning more money than Microsoft are long gone.
This move is about Dell reinventing itself doing exciting things, leading in new markets without the quarterly shareholder distractions (allegedly) , Something Apple is going to learn from in 2 days time.
Hopefully they will have the good sense not to be remain reliant on Wintel.
I think you guys have just invented financial homeopathy.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Probably better for us than Icahn's financial sociopathy.
You can hold down the "B" button for continuous firing.
Dell is the bad guy here, people. I hate to say it, but Ichan is right.
It is kind of a myth that Ichan is the driving force behind the shareholder rebellion; he is just a cheerleader. The driving force is a company called Southeastern Asset Management. They are the ones who filed a motion protesting the MBO just days after it was anounced, they are the ones who have been organizing proxy votes and trying to stop the sale. It is also very hard to portray Southeastern as the bad guys: they are the kind of company that we always say should run Wall Street: they invest long term, based on fundamentals and long-term returns, not stock price fluctuations. They have been holding Dell for years precisely because they thought the market undervalued the firm. They sure as hell aren't going to sell at a price just slightly above market when they think the company will have good returns in the future.
Remember: Micheal Dell does not own Dell, Inc. He sold it for hundreds of millions of dollars and the people he sold it to hired him to manage it. He is paid very well for this, but he has nevertheless continued to treat the company as his personal playground instead of turning it into the stable, profitable B2B vendor that it should have been. He has incompetently driven a company that in 2005 dominated the business market into the ground. Worse, he has actually lied to these shareholders: the SEC fined him $4 million PERSONALLY for cooking the books to manipulate his bonus. The guy is scum!
Why the hate for iBonds? Is it a general dislike of debt or is there something specific?
Apple did need to return cash to its shareholders. Apple was basically borrowed at the bottom of the market for next to nothing. If inflation gets back to something normally then less than nothing. (as an aside, Apple should not have done a stock buyback – it’s stock was overvalued.)
Anyone wanting to buy Dell should have to set up and use one of their awful products for 1 day and then call tech support once. There would be zero buyers. Seriously, buying Dell is like buying a car just based on the company's marketing and image without actually looking under the hood to find out it's a complete piece of crap (in other words a Saturn or Kia). Except Dell is more like a Yugo on craigslist with a flashy paint job and astroturfed reviews. They're 2nd to last in laptop quality, dead last in support quality, and no business with an IT purchaser who has any kind of clue even considers them as a vendor anymore.
So if you're reading this and thinking "hey, I buy from Dell all the time!" first of all, look at your hardware failure numbers. Secondly, fire yourself. Third, note that last time a business I was contracted to work at for a computer replacement project ordered 120 Dell laptops ($800 models btw), 20 were RMAed right out of the box with hardware defects. I guarantee that cost Dell more than it would have to simply build them all with good parts in the first place.
Now Mikey knows how the rest of us feel when we try to call him.