Why go private?
Why go private? Everybody, Facebook included, is making lots of money on the stock market!
The word on the street is that Michael Dell and his rich friends are having an easy time finding the many billions of dollars needed to do a leveraged buyout of the PC and server maker and take it private, especially now that Microsoft has entered the picture with as much as $3bn to invest in the deal. According to a report ( …
For a private company, floating is good. Just ask a banker. (And they won't be swayed by how much money they can make in advisor fees when you float, oh no. The very thought of it!)
For a public company, going private is good. Just ask a banker. (And they won't be swayed by how much money they can make in advisor fees when you go private, oh no. The very thought of it!)
Probably the more pressing issue for Dell at the moment is that there is very little profit in the box making IT industry. Dell are going to have to make some pretty big decisions soon, such as how big Dell want to be, where Dell want to be, which market(s) they want to focus on. This may mean downsizing Dell or it may mean moving Dell's manufacturing. It may also mean outsourcing or off-shoring elements of Dell. It will be far, far easier to carry out this work, without shareholders demanding votes and threatening lawsuits for every decision that they don't like.
You do realise that there are real costs involved in being listed.
The main advantage for the company of being listed is the ability to access cheap cash through selling stock ... but the downside is that it dilutes your own holdings and shifts power into the hands of the stockholders.
The main advantage for the original owners of being listed is that it crystallises the worth of their efforts, and leaves them with millions or in the case of Facebook billions.
It's also great for stockholders if there are big dividends or the stock is rising.
However, there are controls on what a listed company can and cannot do.
and anyone of course buy your stock ...
In a situation where the immediate future looks bleak ... i.e. small or no dividends ... where the future looks like it'll be a shrinking share price ... and where you really need to restructure to address a changing market ... being listed can be a death sentence.
Nevermind Dell... Is Microsoft, back to creating corporate ties in the name of their own share price?
Once WIntel...now WinDell...else possible WinSell?
Now, if this "news" isn't really about _saving_ share value, then you can really tell Microsoft is behind FOSS, with a knife. Well, bedding with Dell puts a knife in their hand regardless.
Talk about out of the frying pan and into the bowels of hell!
I'd much rather my chances in a huge tank full of blood-sucking parasites, investment bankers, piranha, asset strippers, crocs, naked shorters, etc, etc... than trapped in some dark, lonely place with Balmer... trying to make a go of a "deal" with the evil empire. Can't see that ending well ;-)
Alas, poor Ophelia, we hardly knew ye - taken from us before you were even born.
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What's there to raise an eyebrow at? MS don't make physical computers and Dell don't make software, or not much at least. The regulator would only raise an eyebrow at MS buying something like direct competitor in software, for instance if MS bought RedHat or Apple, you could be sure there would be some regulatory investigation, if they bought up HP's Proliant division there would be no need for an investigation.
Having seen the affect of letting Oracle buy Sun.
What will the regulators make of letting a Monopoly SW supplier get into the HW business?
Sadly Microsoft's current "partners" aren't in a position to say anything. When Microsoft say "Jump" you don't even think about whether they'll ever to say "Land"
Google could REALLY (even moreso than with Chromebooks, laser goggles, etc.) be in the hardware business if it buys up Dell:
But, what would Google do with Alienware?
This is clever, right now Dell shares are hot on the anticipation of a deal, shares can be sold while the price is up and bought back later at a discount when it falls through. Meanwhile the company has capitalization.
In my experience when a company wants to take itself private it is for one of two reasons; some bad news that would erode their share price or an anticipated sale of some or all of the company.
Only MD and his investors know the true story, meanwhile it is in play and there is money to be made or lost.
What Dell has shown is that it is one of the best at just in time manufacturing, which has helped it protect margins.
One thing is for sure, Microsoft has no interest in buying Dell, that would kill it's relationship with other OEM's, a shareholding on the other hand gives it influence.
Apple is NOT going to buy it, Apple works in Niches, yes selling overpriced kit to technophobic idiots is still a niche even if it leads to some killer products.
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