MVP444300 Posted February 5, 2013 Share Posted February 5, 2013 They are acquiring the company dirt cheap IMO. Wow. I thought it would be closer to $15 range. Does anyone have any recommendation on whether to keep it until the deal closes (and hope for a higher price) or just cash in your chips now? Link to comment Share on other sites More sharing options...
rmitz Posted February 5, 2013 Share Posted February 5, 2013 They are acquiring the company dirt cheap IMO. Wow. I thought it would be closer to $15 range. Does anyone have any recommendation on whether to keep it until the deal closes (and hope for a higher price) or just cash in your chips now? Just evaluate it assuming no improvement in price. If that's reasonable for you (gains on an annualized basis), then I don't see much downside in it at this point. I wouldn't bet on an increase, though it's a kicker. Link to comment Share on other sites More sharing options...
QLEAP Posted February 5, 2013 Share Posted February 5, 2013 And congrats to everyone who did well on DELL! Wish it would have been even better. And thanks to you txlaw for sharing the thesis :) Link to comment Share on other sites More sharing options...
compoundinglife Posted February 5, 2013 Share Posted February 5, 2013 They are acquiring the company dirt cheap IMO. Wow. I thought it would be closer to $15 range. Does anyone have any recommendation on whether to keep it until the deal closes (and hope for a higher price) or just cash in your chips now? I am probably going to take the money off the table at this point. If something happens that temporarily blocks the deal there could be a chance to buy back in. Unlikely but possible. Link to comment Share on other sites More sharing options...
boilermaker75 Posted February 5, 2013 Share Posted February 5, 2013 They are acquiring the company dirt cheap IMO. Wow. I thought it would be closer to $15 range. Does anyone have any recommendation on whether to keep it until the deal closes (and hope for a higher price) or just cash in your chips now? I am probably going to take the money off the table at this point. If something happens that temporarily blocks the deal there could be a chance to buy back in. Unlikely but possible. I won't be hanging around either as this could be stagnant for a while while I would be "wishing" something happens to increase the price by what at most $1? As soon as I find some other work out to play, or stock to buy, I am out. Link to comment Share on other sites More sharing options...
boilermaker75 Posted February 5, 2013 Share Posted February 5, 2013 Or maybe I'll just hold my shares so I can vote no along with Southeastern Asset Management. http://finance.yahoo.com/news/dell-buyers-woo-investors-disappointed-154539178.html;_ylt=Al1EXn_UPT.xATI4X2nTp7miuYdG;_ylu=X3oDMTN1Y3U2ODFnBG1pdANGaW5hbmNlIEZQIE1lZ2F0cm9uIDIEcGtnAzJjMmQzNmQ0LThhODgtMzE4OS05NWNmLWUzYjYzODYyZmY0NQRwb3MDMQRzZWMDbWVnYXRyb24EdmVyAzExNTY1YWIzLTZmYjItMTFlMi05M2YyLTU4MjFlOGNiYmU5Mw--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3 Link to comment Share on other sites More sharing options...
rohitc99 Posted February 5, 2013 Share Posted February 5, 2013 I won't be hanging around either as this could be stagnant for a while while I would be "wishing" something happens to increase the price by what at most $1? As soon as I find some other work out to play, or stock to buy, I am out. boilermaker75 does it make sense to sell out and buy April calls @14 for the possible 1$ upside ? if the deal fails, we dont lose much. if the management sweetens the deal a bit, we get a piece of it Link to comment Share on other sites More sharing options...
boilermaker75 Posted February 5, 2013 Share Posted February 5, 2013 I won't be hanging around either as this could be stagnant for a while while I would be "wishing" something happens to increase the price by what at most $1? As soon as I find some other work out to play, or stock to buy, I am out. boilermaker75 does it make sense to sell out and buy April calls @14 for the possible 1$ upside ? if the deal fails, we dont lose much. if the management sweetens the deal a bit, we get a piece of it I don't sit around hoping for something, like a better deal out of Michael Dell. Similarly I would not buy APPL calls and hope the price goes up before expiration. I would write INTC March 21 puts and make almost 2% in 39 days. If I get put to I don't mind owning INTC at $20.60. I like either outcome. Modification: I've had too much coffee today, and I probably need to get my eyes checked for new glasses. I need to be more careful when I read posts, especially if I am going to respond to them. I saw April, and read it as APPL, maybe because I was just reading posts on the APPL thread. When I read Prasad's subsequent post I realized what you were asking. Sorry rohitc99, I will be more careful in the future. Rohitc99 your question is a good one, selling our positions and buying Aug 14 calls for a dime a share is probably a good move. Link to comment Share on other sites More sharing options...
oldye Posted February 5, 2013 Share Posted February 5, 2013 I like how they use the rumor date as a benchmark for price, I know the Sec's number one priority is to protect Michael Dell's reputation but maybe just maybe they should investigate who was responsible and who profited from this rumor. Link to comment Share on other sites More sharing options...
Guest wellmont Posted February 5, 2013 Share Posted February 5, 2013 wow md could actually double or triple his net worth from this deal in a few years. Link to comment Share on other sites More sharing options...
Parsad Posted February 5, 2013 Share Posted February 5, 2013 I won't be hanging around either as this could be stagnant for a while while I would be "wishing" something happens to increase the price by what at most $1? As soon as I find some other work out to play, or stock to buy, I am out. boilermaker75 does it make sense to sell out and buy April calls @14 for the possible 1$ upside ? if the deal fails, we dont lose much. if the management sweetens the deal a bit, we get a piece of it I don't sit around hoping for something, like a better deal out of Michael Dell. Similarly I would not buy APPL calls and hope the price goes up before expiration. I would write INTC March 21 puts and make almost 2% in 39 days. If I get put to I don't mind owning INTC at $20.60. I like either outcome. I actually did that, but I bought the March $14 calls. We had sold most of our stock as it went up to $13.70, because I had this gut feeling they were going to rip off shareholders. We did great, but alot of shareholders won't. Once I had sold most of the shares, last Friday I bought the calls...small amount...but I figured "heads I lose a little, tails I win 2-4 times the investment". I suspected the initial offer would be below $14, but that as the stock traded near the $13.65 mark near Friday's close, I thought they would come back with an offer around $14.50-14.75...slight premium to the market close. I still don't understand why everyone is quoting the 25% above the price around when the rumors began, since what does that have to do with anything? They aren't using a 30-day trading average or market close premiums...it's a God-awful shitty deal, but they know they've got most of the votes to get it through. The board should be sued...you would think their twins work for some burger restaurant in Texas! Cheers! Link to comment Share on other sites More sharing options...
oldye Posted February 5, 2013 Share Posted February 5, 2013 its in the actual press release http://www.dell.com/Learn/us/en/uscorp1/secure/2013-02-04-michael-dell-silverlake-acquisition "The price represents a premium of 25 percent over Dell’s closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published; a premium of approximately 35 percent over Dell’s enterprise value as of Jan. 11, 2013; and a premium of approximately 37 percent over the average closing share price during the previous 90 calendar days ending Jan. 11, 2013." I think insider trading rules are different in Texas or something. Link to comment Share on other sites More sharing options...
Parsad Posted February 5, 2013 Share Posted February 5, 2013 its in the actual press release http://www.dell.com/Learn/us/en/uscorp1/secure/2013-02-04-michael-dell-silverlake-acquisition "The price represents a premium of 25 percent over Dell’s closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published; a premium of approximately 35 percent over Dell’s enterprise value as of Jan. 11, 2013; and a premium of approximately 37 percent over the average closing share price during the previous 90 calendar days ending Jan. 11, 2013." I think insider trading rules are different in Texas or something. Thanks Oldye! Cheers! Link to comment Share on other sites More sharing options...
racemize Posted February 5, 2013 Share Posted February 5, 2013 I think insider trading rules are different in Texas or something. Because it leaked? Don't most things leak, generally? I'm not sure what you mean. Link to comment Share on other sites More sharing options...
VAL9000 Posted February 5, 2013 Share Posted February 5, 2013 its in the actual press release http://www.dell.com/Learn/us/en/uscorp1/secure/2013-02-04-michael-dell-silverlake-acquisition "The price represents a premium of 25 percent over Dell’s closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published; a premium of approximately 35 percent over Dell’s enterprise value as of Jan. 11, 2013; and a premium of approximately 37 percent over the average closing share price during the previous 90 calendar days ending Jan. 11, 2013." I think insider trading rules are different in Texas or something. That's not really a problem here. What they're saying is that on the last day before the takeover was rumoured, the market believed that DELL was worth $10.88 a share. The point they are making is that the recent price action in DELL is entirely due to news of a takeover. (This, I think, is a fair point to make.) They're also saying, take the deal, it's good for you based on historical prices. (This I don't agree with at all.) Link to comment Share on other sites More sharing options...
cubsfan Posted February 5, 2013 Share Posted February 5, 2013 There is a 45 day "go shop" period. Do most consider it highly unlikely that a 2nd bidder appears. If everyone feels that MD is stealing the company, is it just that the number is too big to find another viable bidder? Link to comment Share on other sites More sharing options...
Redskin212 Posted February 5, 2013 Share Posted February 5, 2013 I think the Special Committee has a duty to look at the price of the shares for greater than a 30 and 90 day window. The fact that the company was buying back shares at prices higher that the takeover price I believe will be a problem in any defense. I have no clue why the Company was not buying back shares hand over fist when the shares were in the single digits. My guess would be that the Board did not support it given the potential offer from MSD. There really is too much conflict of interest here. Also, it doesn't appear that the Special Committee fought very hard for a higher price - I would be interested to see transcripts from their discussions. Having said that - I sold my shares today as I think it is basically over, the only people who will make money now are the lawyers. Link to comment Share on other sites More sharing options...
Parsad Posted February 5, 2013 Share Posted February 5, 2013 There is a 45 day "go shop" period. Do most consider it highly unlikely that a 2nd bidder appears. If everyone feels that MD is stealing the company, is it just that the number is too big to find another viable bidder? No one is going to make a bid if you know MD wants the company and will block your offer. Who wants Dell without Michael Dell? I think the Special Committee has a duty to look at the price of the shares for greater than a 30 and 90 day window. The fact that the company was buying back shares at prices higher that the takeover price I believe will be a problem in any defense. I have no clue why the Company was not buying back shares hand over fist when the shares were in the single digits. My guess would be that the Board did not support it given the potential offer from MSD. There really is too much conflict of interest here. Also, it doesn't appear that the Special Committee fought very hard for a higher price - I would be interested to see transcripts from their discussions. Having said that - I sold my shares today as I think it is basically over, the only people who will make money now are the lawyers. I agree. Way too much conflict of interest. Dell should have removed himself from the board as soon as there was any intention to pursue this. The board needed to remain completely neutral and removed from Dell. Cheers! Link to comment Share on other sites More sharing options...
Guest wellmont Posted February 5, 2013 Share Posted February 5, 2013 it's also because MSD owns a lot of stock. there are no strategic buyers. and no financial buyers without MSD, MSD capital, and MSFT on board. this is a sweetheart deal. MSD is exploiting these unique factors as well as the credit bubble. they did not buy any stock under $10 because that would have raised the cost of the deal for MSD. MSD could have put more leverage on Dell inc and started to manage the company for all shareholders. but he decided to capture the upside for himself, msd capital and silver lake. cheers! Link to comment Share on other sites More sharing options...
cubsfan Posted February 5, 2013 Share Posted February 5, 2013 That's interesting response. Excuse my ignorance on these takeovers... But, hypothetically, if a cash buyer offered $18/share - how in the world could MD oppose "in the best interest of shareholders"? Just curious as to the legal or BOD logic for rejecting such an offer. I know Dell is not Dell without MD - but surely Chambers of Cisco or Ellison from Oracle could run Dell. Link to comment Share on other sites More sharing options...
oldye Posted February 5, 2013 Share Posted February 5, 2013 I think insider trading rules are different in Texas or something. Because it leaked? Don't most things leak, generally? I'm not sure what you mean. I think all market participants should be privy to the same data, if the rumors are true and the stock is going up, then dell should have announced that they are in talks about going private and then worked with the Sec to launch a criminal investigation into who was responsible for leak. There were obviously people who knew the rumor was true and they probably made a fortune buying short term options to profit from this deal. Just because its "business as usual" does not make it right. Dell has been investigated for leaking information related to the Perot acquisition and this is another example of how unethical these people are. Link to comment Share on other sites More sharing options...
petey2720 Posted February 5, 2013 Share Posted February 5, 2013 I think the real question we should be asking is: Can Southeastern, Dodge & Cox, Franklin Resources and or any of the other large institutional owners use their shares to force a better deal for shareholders? Link to comment Share on other sites More sharing options...
Guest wellmont Posted February 5, 2013 Share Posted February 5, 2013 That's interesting response. Excuse my ignorance on these takeovers... But, hypothetically, if a cash buyer offered $18/share - how in the world could MD oppose "in the best interest of shareholders"? Just curious as to the legal or BOD logic for rejecting such an offer. I know Dell is not Dell without MD - but surely Chambers of Cisco or Ellison from Oracle could run Dell. there is no cash buyer who would offer $18. before an offer is made, they would send out feelers to MSD to see if he favored the deal. if he didn't, then nobody would make the offer. MSD will sell this for a lot more than $18 when it's all said and done. Link to comment Share on other sites More sharing options...
cubsfan Posted February 5, 2013 Share Posted February 5, 2013 Ok, thanks for the input. I've owned some Dell for a couple of years. Never thought MD would steal the company. But I can see it's rigged now. Always expected him to buyback shares at this level. Pays to really understand and trust management - I didn't this round! On to better investments. Link to comment Share on other sites More sharing options...
ExpectedValue Posted February 5, 2013 Share Posted February 5, 2013 Wow the folks at Southeastern really got their teeth kicked in on this one. According to Bernstein their cost basis was $20 for their shares Link to comment Share on other sites More sharing options...
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