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Dell Is Now a Private Company Again
Gunfighter writes "StreetInsider.com reports that Dell, Inc. completed its go-private transaction by Michael Dell, Dell's Founder, Chairman and CEO, and Silver Lake Partners, a leading global technology investment firm. Stockholders will receive $13.75 in cash for each share of Dell common stock they hold, plus payment of a special cash dividend of $0.13 per share to stockholders of record as of the close of business on Oct. 28, 2013, for total consideration of $13.88 per share in cash. The total transaction is valued at approximately $24.9 billion."
October 6, 1997, Michael Dell was asked what he would do to fix Apple. His answer, "What would I do? I'd shut it down and give the money back to the shareholders". Well Dell has returned money to his shareholders. The Smartphone and Tablet industry will take care of the shutting-down-Dell part in due time.
Dell has one less thing to worry about: quarterly profits and revenue. This is right thing for struggling or declining companies. "analysts" won't bug them every moth how their market is shrinking and sales declining. Bet employees will feel safer too without threats of layoffs every time they don't meet "expectations"
since they are no longer bound to share-holders; and can innovate for the sake of innovation? No need to bow down to MS Overlords and do as they or the so-called markets please. They can afford to lose a billion bucks in chasing their own dreams.
If you keep throwing chairs, one day you'll break windows....
Strictly speaking, it's probably most accurate to say that Dell was right about Apple 1997 except that they'd just recently made; but not yet seen the payoff from, the choice to get Jobs and NEXT.
Their "Hey, let's sell a confusing selection of increasingly antique PPCs in beige cases for increasingly risible prices, on the strength of our mostly-obsolete OS" strategy wasn't going anywhere, and would only have gotten worse as time went on (The price/performance of Wintels was improving, the sheer nastiness was decreasing (remember the good old days before bootable ATAPI CD drives and other basics? That's the kind of shit that made Apple's tendencies toward SCSI seem classy rather than merely expensive), and Apple's in-house attempt to modernize Classic MacOS was a miserable failure).
Going "private", right. The money supposedly comes from Silver Lake Venture Partners. But they don't have $24 billion. Most of it is borrowed. From banks. Which borrow it from the Fed at very low rates. Which creates Government debt to pay for it.
"Private equity" today is really equity to debt conversion. With interest rates so low, that's very attractive to management.
This is "quantitative easing" at work.
We'll have to see the direction he chooses to take the company now. As I understand it, before "Dude, you're getting a Dell!", Dell was actually known for making fairly good systems for a major brand. I remember working for CompUSA in the late 90s, and any Dell system we sold was required by them to go through a lengthy systems diagnostic process before being released to the customer. And some of their LCD monitors are known as being among the best. (Everyone raves about the U3011, etc.)