Micheal Needs to do This or Fold
The recent change in US tax laws are also forcing Micheal's hand.
In order to buy EMC he needed to raise capital and cut costs to do it. Borrow, Vmware DVMT stock, sell off some assets. Achieve cost reductions at EMC by reducing the workforce, eliminate products [think six disk lines, that hammer will fall in 2019], eliminate pay raises and stock options, and move travelers out of Marriott class hotels and into Holiday Inns, to name a few.
As of February 2018, Dell Technologies had nearly $53bn in debt. And was deducting $2bn a year in interest. New tax laws restricting interest deductions has the potential to turn a loss into a taxable profit, further straining company finances. Dell's finance people mysteriously claim that a lower corporate tax rate offsets the deduction. But if you are losing money, you pay no taxes; so who are they crapping?
Check out https://www.nytimes.com/2018/02/02/business/dealbook/is-dells-debt-load-pushing-it-into-a-deal.html
Certainly there are other dynamics going on, cashing-out, nervous bond investors, and the loss of hardware sales as customers move to the cloud. Dell Technologies will likely be a smaller company in 5 years. And eventually Dell could be another failed company bump in the road like once industry titans like DEC and Xerox.
Good luck Michael.
Biting the hand that feeds IT
