Dell Tech: We have a plan B for bog standard IPO

Dell Technologies has finally confirmed what the rest of the industry has suspected for some time: it is considering a straightforward IPO in addition to a torturously tangled reverse merger involving VMware. Talk of Dell going public again first surfaced last month, when a loquacious insider told Reuters that a plan was on …

[Charlie Clark]

Silverlake's exit strategy

US bond yields are now over 3% so it's going to be hard to pay down the debt just from cashflow. Much better to stiff the chumps who bought the VM Ware tracking stock. If the holders won't do this as part of the IPO they can probably be forced to do it in a subsequent reorganisation*

* including selling off and spinning off all the shit that Dell bought when it when private.

[Anonymous Coward]

Re: Silverlake's exit strategy

Sound reasoning sir, but maybe they don't intend to pay down the debt? Gear up VMDell, pillage it for dividends, and then let the flaming wreckage float away. And the great thing about a reverse takeover is that it just happens. No special scrutiny around an IPO, and even if the deal doesn't have any cash element to run off with, all the erm, "deal architects" do is bleed their stock back into a gullible market ASAP.

Surely a private equity house wouldn't do anything as irresponsible as that?

[Charlie Clark]

Re: Silverlake's exit strategy

but maybe they don't intend to pay down the debt?

Almost certainly not, hence, the exit strategy. Incredible that the bonds issued with those duration and yields (what was it? 8% for thirty years or something even more ridiculous?) were even given a rating other than YHL*

* "You're having a laugh". Just made it up but probably makes as much sense as most of the ratings that the are issued by Standard & Poors, Moody's and Fitch…

[Zippy´s Sausage Factory]

I can just imagine Dell's accounting department:

"Are we a public company, or a private company?"

"What day is it?"

"Um... Friday."

"Private.... I think."

"Are you sure?"

"Toss a coin, then..."

[Anonymous Coward]

Winners and Losers if Dell acquires DVMT

This is all about who ends up paying off EMC acquisition debt. Raising interest rates will ramp up the cost of that debt.

Winners:

-Michael Dell (Obviously)

-Silver Lake (Obviously)

-Dell Technologies (pressure on *margins* will reduced on servers and storage which are struggling)

Losers:

-DVMT shareholders (they could do better)

-VMware (since they will pick up the debt from Dell buying EMC)

-VMware employees (RSU valuation will be driven down dramatically)

-VMware customers (get ready for more Oracle-like pricing to pay off that debt)

-VMware ecosystem partners (your reselling VMware will help seal your own death as you will be feeding the Dell monster)

On the other hand, a Dell IPO means investors will carry the debt... and it will be a loooooong slog for Dell.

[Anonymous Coward]

Not sure why all the negativity

Let's face it. Dell has gone from strength to strength whilst the rest of the infrastructure players have struggled, they are doing the right thing here and cleaning up the debt.

[Anonymous Coward]

Re: Not sure why all the negativity

Oh I don't know... maybe because it will suck the soul and profit out of VMware and make customers, partners and employees miserable all so Dell can rule low margin infrastructure?

[ntevanza]

Stop me if you've heard this before

I'm thinking of taking Dell public. Funding secured.