For You Believers in DELL

[Myth465]

Myth -- agree on comments re Android.  Also share hope for Motorola -- but tough for me to personally determine.  The economics and compet adv of the core GOOG businesses are so powerful that I wish they hadn't moved into hardware...but what's done is done -- will be interesting to see how develops...GOOG guys are no doubt smart.

 

I think the hardest part about Tech is the reinvestment. Google gives me hope, Microsoft and HP scare the hell out of me. Motorola makes sense for panients and product design, but not sure how they will handle the PR and interactions with other Andriod phone makers. Truth be to told they were the only viable game in town, and would have probably gotten to 70% market share vs Apple. Now they may have given Microsoft a way in.

 

Only time will tell, I think I will keep my dollars allocated towards simple industries but Tech is sure fun to watch. If I do buy it will be in moated companies such as Google and Intel. I cant wait to see what this tablet buzz is about....

[VAL9000]

Sorry to derail this Dell thread with more HP talk, but the relevant audience seems to be here :)

 

I'm not so convinced that HP is making a strategic blunder.  The PC business is their worst performing line of business, with an operating margin of 5.9%.  Their top line operating margin is 9.8%.

 

Now when I look at IBM..  they sold off their PC business back in 2005 while enjoying a top line operating margin of 10-11%.  Since then, they've boosted this margin up to 18% or so in 2010.  It's been a bit choppy but there's a clear uptrend there.

 

HP appears to be following Oracle and IBM's model: enterprise software plus enterprise hardware.

 

The PC business has awful economics.  Palm was a stupid purchase.  These are both sub-optimal places for HP to focus its energy on.  Software and services are a much better business to be in.  I'm not applauding the purchase of Autonomy because I don't know much about them, but I think the strategy has merit.  That said, there are easier investments for me to make at this time.  I'll be watching HPQ as the story unfolds.

 

(No position in HPQ or DELL)

 

[tombgrt]

Interesting post VAL. But Dell seems to see it totally different :

 

There are also other aspects to this. If one remembers back to the last time a large PC company was spun off or sold, there was a lot of share loss in servers for IBM (NYSE:IBM). We have far greater share than IBM does in X86 servers now. Globally they are 14-15 percent. We are about 26-27 percent. Their [iBM server] share has gone down, down, down since they spun off the PC business.

 

There are very important reasons for that: one is the integrated nature of client and server sales in many accounts. There are also important economic reasons for it. If you open up a server and look at what's inside a server, it's processor, disk drives and memory. Those are the three primary cost ingredients that go into a server. Where are most of the processors, disk drive and memory in terms of industry volume today? They are still in the client. Actually, about 95 percent of them are in the client. So if you are not in the client business, you have a far, far smaller volume so your costs for those materials just went up.

 

Who is successful in volume x86 servers today? You would say Dell and also HP. Both of those companies have had this client business volume to go with it. When that goes away for the other guys, it will create opportunity for us.

 

I can relate with both views but my expertise is to limited to pick a side here. I can believe this could be the right move for HPQ but on the other hand it could be very advantageous for DELL as well. Time will tell!

[VAL9000]

Tom, agreed.  It's not a zero sum game.  This could be a good move for Dell and HP.

 

Dell is right about the market share and that makes sense.  But where he sees their server market share going down down down, I see IBM's profits going up up up.  Which of these metrics is more indicative of a good strategy?

 

[Myth465]

Hey Val nice to see you back.

 

I think getting out of PCs has merits, but they way they did it was beyond stupid. Also what about cross selling with Corporations. I think any company which buys from HP is pissed right. The thought of buying hardware from some Asian vendor who may buy HP and the uncertainty has to be annoying.

[rranjan]

Sorry to derail this Dell thread with more HP talk, but the relevant audience seems to be here :)

 

I'm not so convinced that HP is making a strategic blunder.  The PC business is their worst performing line of business, with an operating margin of 5.9%.  Their top line operating margin is 9.8%.

 

Now when I look at IBM..  they sold off their PC business back in 2005 while enjoying a top line operating margin of 10-11%.  Since then, they've boosted this margin up to 18% or so in 2010.  It's been a bit choppy but there's a clear uptrend there.

 

HP appears to be following Oracle and IBM's model: enterprise software plus enterprise hardware.

 

The PC business has awful economics.  Palm was a stupid purchase.  These are both sub-optimal places for HP to focus its energy on.  Software and services are a much better business to be in.  I'm not applauding the purchase of Autonomy because I don't know much about them, but I think the strategy has merit.  That said, there are easier investments for me to make at this time.  I'll be watching HPQ as the story unfolds.

 

(No position in HPQ or DELL)

 

It might not be so easy for HP to follow the IBM or Oracle though.  As Myth pointed out , I also did not like the way they went about this business of getting out of the PC market. No matter how I look at it, they could have added best value by buying their stocks as much as possible during last few months.

[VAL9000]

Myth, it's good to be back.  Except for the drama on that other thread :P

 

I can't say that the argument around keeping PSG is really there for HP.  Sure they could have handled it differently, but I'm not sure the outcome would be any better.  I like decisiveness - compare Apotheker to Bartz of Yahoo.  I read this in in an opinion piece in FT today:

 

"Even if the new strategy is vindicated, which it may eventually be, he needlessly alienated investors by thrusting so much unpalatable information and future uncertainty on them at once. He should have taken things steadily rather than making a big bang." (http://www.ft.com/cms/s/0/f68ef02a-ce3b-11e0-99ec-00144feabdc0.html#ixzz1W3elwn74)

 

Since when are coddling and message management the way to run a public company?  This argument seems patronizing to investors.  As though we can't handle ourselves in the face of changing business conditions.

 

Oh I found this, too:

http://www.zdnet.com/blog/btl/ibm-reclaims-server-market-share-revenue-crown-in-q4-says-gartner/45334

 

As Michael Dell said, IBM dropped to 14% market share but he left out the part where they take 36% of the revenue.  This business model is looking better and better for HP.

 

Myth, with regards to your point about annoying HP's customers, well, that's the reality for everyone else today.  Nobody other than HP sells enterprise software, servers, and PC's.  Dell is the only major server vendor that also sells PC's at volume.  I credit Dell's model for what it is: a great business model.  Can HP's approach really compete with Dell?  What would it take HP in dollars and headaches to get there?  As rranjan points out, it's not going to be easy to be a bigger player in the software market, but it has to be easier than trying to make a mint out of the PC business in the face of Dell and all other Asian manufacturers.

 

Maybe I will buy some HPQ after all. :D

 

[PlanMaestro]

Are we at a point where Dell is beyond hatred and it is being just ignored? Twitter and Corner silence.

 

 

[PlanMaestro]

Shares in the company, which like rival Hewlett-Packard Co is losing market share to mobile devices such as Apple Inc's iPad, dived more than 9 percent in after hours trade. The world's No. 3 PC maker forecast a 2 to 4 percent revenue gain this fiscal quarter, to $14.7 billion to $15 billion, well short of the $15.4 billion Wall Street had been expecting.

 

"Clearly we are seeing a bit more challenging demand environment," Dell Chief Financial Officer Brian Gladden said in an interview. "Europe, in general, was down for us."

 

[tombgrt]

Below $24b market cap after hours. What was their cash position again? Lots overseas but still. Don't think the earnings from 2011 (fiscal 2012) were very representative but nonetheless this price is bizarre. But other things are cheaper.

[Parsad]

I still don't think DELL is really cheap.  It's fair to slightly undervalued in my mind based on its ability to grow its cash flows, and the lack of competitive advantages.  Cheers!

[tombgrt]

I still don't think DELL is really cheap.  It's fair value in my mind based on its ability to grow its cash flows, and the lack of competitive advantages.  Cheers!

 

I have to agree on those points. Pretty much why I stayed out. That and.. it's tech. Because Dell isn't growing CF, buybacks also add only limited value at this point. Michael Dell is in a tough spot.

 

Not a lot of love for Prem btw!

[PlanMaestro]

I remember someone saying we were spoiled last December  ;)

 

Per Share

Cash and equivalent  $7.1

Debt                        $5.0

FCF/share                $2.5 - $3.0

Price                        $13.0

 

[txlaw]

DELL is actually still very cheap.  It's just that the market will never recognize this until there is sustained and non-sporadic revenue growth. 

 

The big decline in product revenue and lower margins was quite predictable, actually.  In a quarter where  problems in Europe continued, where public sector sales were of course going to go down, and where the iPad had record setting sales, how could anyone be so optimistic as the Street?  It's no wonder Chanos leapt on the opportunity to short DELL, correctly realizing that Street expectations would not be met.

 

Stay the course -- this is a long game, here.  Nice to see growth in the strategic areas, as expected.  Skeptics will be proven wrong in the long term, IMO.

[WarrenWatsa]

This is a good week to look at: DELL, HPQ (reports tomorrow), STX

 

STX got hit hard today.

 

 

As they say: you can have good news or cheap stock prices.

 

 

 

 

[Ballinvarosig Investors]

I am with Parsad on this, for once. I actually held a tiny amount of stock a few years ago, but sold when they announced the deal to buy Perot Systems. Don't get me wrong, I like Michael Dell. I don't think there is a person in the world who could run the operational part of Dell as well as he can. You only need to look at his competitors margins and to see that he is running things as well as anyone possibly could. In that regard, I commend him for his skill and enthusiasm. My problem with him though is the capital allocation part of his skillset is sorely lacking. Look at the acquisition of Perot Systems for example. A massive amount of cash was spent buying a similar business but at an inflated price (1.4x sales as opposed to 0.5x sales for Dell and 30x earnings as opposed to 6x earnings for Dell). It's all well and good talking about free cash flow, but cash is no good if shareholders aren't seeing it, or it isn't being allocated properly. On the other hand, if Dell had used that $4billion and returned it to shareholders through buybacks, we might be looking at a $20 stock today.

 

If you ask me, Michael Dell should follow the advice that he himself gave to Apple back in 1997 - http://news.cnet.com/2100-1001-203937.html

ORLANDO, Florida--When it comes to the state of Apple Computer, everyone has an opinion.

 

And at the Gartner Symposium and ITxpo97 here today, the CEO of competitor Dell Computer added his voice to the chorus when asked what could be done to fix the Mac maker. His solution was a drastic one.

 

"What would I do? I'd shut it down and give the money back to the shareholders," Michael Dell said before a crowd of several thousand IT executives.

I think when Dell build up the cash balances further, they are going to simply do another Perot System-type acquisition and yet again, shareholders will see good money thrown after bad. After all, all Michael Dell knows is how to run a computer hardware company. Given his history, it's unlikely he will ever admit that he operates in a lousy business and that he should exit it and make himself redundant.

[Munger]

"Not really cheap" -- I would respectfully disagree.

 

Accurate to assert that the future is cloudy for Dell but this is true for all tech companies...so I wouldn't challenge the notion that the business should be valued at a discount to the market until the company demonstrates more consistent performance.  However, the risk/reward is heavily in favor of making money on an investment in Dell for anyone with the capacity to hold the stock for 3-5 years. 

 

Market cap:  $24.0B

 

Cash:          $17.2B

Debt:          $  9.0B

 

So the balance sheet shows net cash of $8.2B -- to be conservative, let's assume that all of this cash is held overseas and tax at 30%, which produces a net cash figure of $5.74B.  Using this number to calculate EV, we get:

 

EV:                                  $18.25B

FCF (trailing 12 months):  $  4.90B

EV/FCF:                            3.7x 

 

 

So tomorrow you'll likely be able pay 3.7x trailing FCF to secure ownership of a company with a global brand and huge difficult to replicate scale led by an individual who:

1) is one of the most accomplished CEOs in the history of tech, with a reputation that gets him in front of every potential client for which Dell has a product/service offering

2) is also a multibillion $ shareholder, with personal purchases over the past few years totaling upwards of $200 million

3) has a 20+ year track record of generating gobs of free cash flow year in and year out...important to emphasize -- he has generated massive free cash flow (true excess cash) every single year, good economy or bad

 

Who knows what the exact future holds for Dell and there is unquestionably risk in an investment...but hard to believe the company won't continue to play an important role in the tech ecosystem well into the future...and at 3.7x trailing FCF, the risk/reward is pretty good for long term investors.

 

 

 

 

 

 

[Munger]

Dell has bought back large amounts of stock over the past few years.

 

The Perot acquisition was actually pretty good.

 

Dell laid out his plan in a recent interview with Forbes -- we'll see if he delivers.

 

 

Question: Dell has changed a great deal over the last decade; I expect it will change a great deal during the coming decade. If you were to describe Dell in 2022, what would that Dell look like?

 

Answer: In 2022 Dell has become a true end-to-end solution provider, vertically-focused, solutions-focused and creating value for customers.We are not a copy of HP or IBM. We don’t have to protect aging legacy businesses; we can buy firms that are leading in a critical technology area and be faster to market with a more advanced solution to leapfrog those companies.

 

We will have end to end solutions, but rather than being based on thinking that goes back decades, our solutions will be based on contemporary thinking by young companies that have already proven their success. By 2022 we expect to lead this solutions market, not by chasing IBM and HP from behind but by using acquisitions to jump ahead of them.

 

On tablets and smartphones

 

Question: Everyone is excited about smartphones and tablets at the moment and Dell has pulled back from this segment. Why do you feel that is the strategic play to make and what conditions will have to exist before you reenter (or will you ever reenter)?

 

Answer: Currently the tablet market is really an iPad market and the smartphone market in our space is defined by troubled vendors like RIM and Nokia who are struggling for survival. Microsoft Windows 8 is exciting, and you’ll see a lot of activity from us as Windows 8 becomes available, for now we are more interested in the business solutions to Smartphones regardless of who builds them.

 

If the market changes so that a vendor like Dell can compete with smartphones more successfully we’ll likely reenter but, until then, our focus is going to be on managing, securing, and keeping these devices fed. We have many avenues to success and that falls closer to our emerging core competence. The recent Wyse acquisition strengthened significantly, for instance, our ability to uniquely manage, provision, and securely provide services to both tablets and smartphones, expect to see our biggest emphasis, at least for the short term, on that aspect of this business.

 

On acquisitions:

 

Question: You have been unusually successful with acquisitions. What do you do that is unique and how did you come around to the idea of doing acquisitions in this way?

 

Answer: First you have to understand that value doesn’t come from acquiring companies it comes from what you do with them. We look at over 250 companies a year to fill gaps we have identified in our product lines. We then generally partner with many of them to understand their strengths and weaknesses and then purchase the few that make sense for us to own. We lead with a massive amount of analysis and follow with execution based on what we have learned to focus sharply on addressing the acquired firms known shortcomings, which often come down to just scale. We can give these firms scale very easily.

 

Since we have no legacy technology in these areas none of our effort is focused on protecting existing executive turf or legacy products. There are few if any internal conflicts and that makes every part of the acquired company important. Much of our initial work is to determine, later protect, and eventually enhance the value of what we have acquired. This is systematic and repeatable process that we first implemented with EqualLogic and Dave Johnson, who joined the firm later, has been instrumental in making this into a process we have repeated since.

 

Using EqualLogic as an example we were able to grow their 3,000 customers to over 50,000. This established a process where we start with a successful company and rather than the more typical process that other firms use of blowing the acquisition up in order to integrate it in existing legacy lines we attach the company to Dell resources which act like a huge business booster. The end result is our acquisitions increase in value dramatically while other approaches generally have the opposite effect.

 

The acquired companies like this as well because without us they typically have 4 bad choices either they can’t grow fast enough to compete with larger competitors and fail, never grow to critical mass and fail, get acquired by someone else that destroys everything they painstakingly built, or maybe after a long period of time they make the cut to success. We fast track them to this last most favorable alternative and that is why our retention of both employees and top executives from these firms is so high.

 

In the end while others seem to prioritize integration we prioritize preserving and enhancing value which is why we are so much more successful preserving and enhancing value. We simply believe that making something better trumps taking absolute control of it.

 

On the coming Annual Analyst Conference

 

Question: The Dell Annual Analyst Conference is coming up. What should the analyst community expect from Dell since the last conference?

 

Answer: They should expect a massive change from the desktop focused Dell of the past. Our solutions portfolio, particularly in the mid-market, has grown substantially and our ability to provide complete solutions from client, to security, to management, to back end processing, to storage, to networking, has increased dramatically.

 

We are now a company with the most advanced market tested technologies in a number of critical IT segments and expect that we’ll provide proof points that will demonstrate that leadership. We are nothing like we once were and we are very proud of the changes we have made.

 

We’ll show them a Dell that is now a full service provider, one that has unique solutions that lead our industry and segment, and one that is uniquely able to address tomorrow’s problems with tomorrow’s technology both now and in the future.

 

We aren’t planning on being the next anyone else; we are planning on making everyone else want to be the next us.

 

Wrapping up:

 

 

I’ve known Michael Dell for a number of years but this is the only time I’ve actually interviewed him. This conversation reflects the unique advantage of a founder more interested in building strategically than focusing exclusively on short term quarterly results. His ability to acquire companies and increase their value remains relatively unique this decade and his approach to acquisitions has become an industry best practice that most other firms seem unable to emulate.

 

What generally makes a founder different is the ability to create and execute a long term vision. In our conversation Michael Dell demonstrated this unique ability which likely will remain as one of Dell’s greatest assets.

 

[Munger]

For those interested in Dell, here is another interview. 

 

 

A man with a dream, a vision, and an uncanny ability to innovate through technology. Michael Dell is the man behind Dell, one of the most profitable computer companies in the world.

 

Michael skipped his college education and started the company in 1984 with $1000 in his pocket and an extreme passion for gadgetry. Mr.Dell took some time with us to reflect on his strategies for success, his thoughts on implementing a sound economy, and the key characteristic that marks you as an Entrepreneur for life.

 

Alister & Paine: You, along with many other notable entrepreneurs, opted to leave college to pursue your business idea. What inspired you to take that risk and why couldn’t it wait?

 

Michael Dell: When I was 19, I saw what I thought was a huge opportunity to change the way personal computers were made and sold. I didn’t have an epiphany…the idea was cultivated over time.

 

In high school I purchased and took apart one of the very first IBM PCs. I made two interesting discoveries: 1) none of the parts were made by IBM 2) the system that retailed for $3,000 actually cost IBM about $600. I immediately saw this as an opportunity. I started upgrading my own systems, using the same components as IBM, and selling them. The idea grew from there.

 

Alister & Paine: What obstacles did you face, and how did you overcome them, while building your business?

 

Michael Dell: We grew about 80 percent a year the first eight years of our business and 60 percent the following six years. Scaling our operations and our team to keep pace with that kind of growth was by far the biggest challenge for us in the early days. Fortunately, there were a lot of really smart people looking to join a high-risk, high-reward venture like ours…and we were always hiring!

 

Alister & Paine: Technology changes at lightning speed by its very nature. How is Dell keeping pace, particularly in the mobility and cloud computing space?

 

Michael Dell: You’re right, new technologies and trends—like cloud computing, mobile, and consumerization of IT—continue to change our industry every day. The good news for us is, with each breakthrough, IT becomes even more embedded in business and in life. It’s increasingly the way people connect, products and services are delivered, valuable data is stored and shared, business is done.

 

For business and organizational customers in particular, the spotlight has shifted from the latest, greatest device to how IT can help them solve problems and achieve their goals. This has fundamentally changed our business strategy, compelling us to evolve well beyond PCs and devices to address the end-to-end IT needs of our customers around the world. We’re a very different Dell today with skills and capabilities in services, data management and security, software and peripherals, cloud and mobile solutions, networking and end user computing.

 

Alister & Paine: The competition to win and retain consumer business is tough. How is Dell doing and where are you focusing your efforts for the future?

 

Michael Dell: Today, roughly 80 percent of our business is with businesses and public-sector organizations. Ninety-five percent of all Fortune 500 companies and 100 percent of G20 governments are Dell customers. While we have a strong consumer presence and will continue to compete in that space, it’s important to focus and commercial is where we expect most of our growth will come from.

 

Ours is a $3 trillion industry and only about $250 billion of it is consumer. We’re laser-focused on the $2.75 trillion opportunity that is commercial. So you’ll see us not only providing devices that generate consumer and enterprise data, but the technology infrastructure that supports, manages, connects and secures it, too.

 

Alister & Paine: You recently described Dell as a serial acquirer. Can you give us some insight into your thoughts on Intellectual Property and how it fits into your business strategy?

 

Michael Dell: IP, acquired or organically developed, is a fundamental part of our long-term growth strategy. We’ve acquired about a dozen companies in the last two years. Each acquisition introduced important innovations and expertise into the Dell family that enabled our end-to-end solutions strategy. But we’re also investing in organic innovation. In 2011 we committed $1 billion to R&D. In less than a year, we’ve opened 12 enterprise solutions and cloud centers around the world, with more to come.

 

These investments mean we now have some of the best storage, security, networking and cloud capabilities around, and we’re addressing the spectrum of IT requirements, from the data center to the desktop and out to the mobile endpoint.

 

Alister & Paine: After nearly 28-years of leading Dell, what inspires you to keep at it?

 

Michael Dell: I’ve always been inspired by technology. I remember as a kid being fascinated by my dad’s adding machine. I could type in an equation and out came the answer. It did the tactical work while I thought up the next complex problem for it to solve.

 

That’s still how I look at technology: as a tool for solving a lot of the big challenges in the world. Just think about all the opportunities in the world around energy, health care, education and solving the unsolved problems in science. More often than not, a computational problem is at the heart of it. Today’s IT, just like my dad’s adding machine, is all about solving those problems. It’s exciting and inspiring to lead a company that is delivering the solutions enabling those discoveries.

Alister & Paine: What one character trait do you think a person must possess to be a great entrepreneur?

 

Michael Dell: Curiosity. Without it, human potential is finite; but with it, anything’s possible.

 

 

[Uccmal]

I hope when you work out balance sheet cash you are subtracting recievables from payables.  My last look, months ago, showed that payables were double receivables.  You could treat this as float earning 0.5% I suppose, but is definitely not cash.  This is especially true in the service industry Dell is moving toward, where you need to make your payrolls at the same time as you receive your revenue, or even earlier. 

[Munger]

I personally don't assume Dell is headed for liquidation but rather will remain a viable going concern that will grow again (at least modestly -- 2-4% annually) at some point in the future.  Under this scenario, the cash stemming from working capital will accrue to shareholders in some form.

 

Of course there is risk with an investment in Dell but the general point is that odds are heavily in favor of making money for long term investors in large part because the stock very cheap, even if you did net out WC and fully tax excess cash by another 30%.  And if Michael Dell delivers on his plan, the stock will deliver huge returns although it is impossible to know with any certainty if this scenerio will play out...as a result, I don't view Dell as an "all in" opportunity despite the valuation and cash flow characteristics of the business. 

[Liberty]

Well, you guys who like DELL just got a nice opportunity. Down over 16% right now.

[roughlyright]

I have one comment on Dell. Today's price of Dell is same as where it was on September of 1997.  On September 1997 it was at 12.25, according to yahoo.

 

In 1997, Microsoft was the king of the software area. Intel and Dell ruled the market with low priced computers and chips. Together this group provided formidable competition to world in providing low-cost PCs. Dell had a great moat because of the low-cost structure compared to Compaq, HP and IBM. With the information we had *at that time*, it was a rational decision for an investor to put their money in to Dell. Their cash-flows were growing. They had a float similar to insurance companies, because they were collecting money before delivering the product to the customers.

 

Now 15 years later you did not make a penny on this investment, despite being right about the company and its moat in 1997, with the information we had at that time. What makes us think that 15 years from now the result is going to be vastly different?  If you adjust the results for inflation, an investor lost lot of money even after 15 years. 15 years ago it looked like a rational decision based on the information we had, but now proven dead wrong, based on the facts alone.  landscape has changed dramatically now, with pretty strong forces against it. What makes Dell's position so good now?

[PlanMaestro]

I have one comment on Dell. Today's price of Dell is same as where it was on September of 1997.  On September 1997 it was at 12.25, according to yahoo.

 

In 1997, Microsoft was the king of the software area. Intel and Dell ruled the market with low priced computers and chips. Together this group provided formidable competition to world in providing low-cost PCs. Dell had a great moat because of the low-cost structure compared to Compaq, HP and IBM. With the information we had *at that time*, it was a rational decision for an investor to put their money in to Dell. Their cash-flows were growing. They had a float similar to insurance companies, because they were collecting money before delivering the product to the customers.

 

Dell was the best performing stock of the 90s. Partly because its moat was somewhat overstated, and mainly because we were in a tech bubble (you might have heard of it ;D). Dell the stock performed so well that its valuation was out of whack with reality. Now 15 years later:

 

* check the earnings per share then and now

* check the P/E then and now

* check the cash on hand then and now

* check the recurring earnings then and now.

 

The problem was Dell then, the stock and investors, not Dell now.  There is a difference between a good company and a good stock.

 

Disclosure: I don't have Dell.

[txlaw]

Just to reiterate what Plan said, DELL today is different than DELL in 1997.  The price may be the same, but the company is not.  Big difference.

 

I suspect DELL will trade at low levels for a while because the Chanos "value trap" thesis is going to be the talk of the value investor community, who are the only people who really believe (or used to believe) in DELL.