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DELL - Dell Inc.


txlaw

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http://www.bloomberg.com/news/2013-08-15/dell-sales-profit-tops-estimates-ahead-of-buyout-vote.html

 

So 5% drop in PC revenues, 8% increase in severs/storage sales but 72% drop in earnings.

 

Sounds like one hell of a moat :P

 

Icahn has complained that MSD started a PC price war this year to lower earnings, thus helping his case for a buyout

 

GAAP Earnings don't mean a whole lot at dell right now. Look at Operating and Free Cash Flow.

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http://www.bloomberg.com/news/2013-08-15/dell-sales-profit-tops-estimates-ahead-of-buyout-vote.html

 

So 5% drop in PC revenues, 8% increase in severs/storage sales but 72% drop in earnings.

 

Sounds like one hell of a moat :P

 

Icahn has complained that MSD started a PC price war this year to lower earnings, thus helping his case for a buyout

 

GAAP Earnings don't mean a whole lot at dell right now. Look at Operating and Free Cash Flow.

 

Just as a follow up, look at R&D spend you have an $130 million headwind so far this year from that alone.

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Guest valueInv

http://www.bloomberg.com/news/2013-08-15/dell-sales-profit-tops-estimates-ahead-of-buyout-vote.html

 

So 5% drop in PC revenues, 8% increase in severs/storage sales but 72% drop in earnings.

 

Sounds like one hell of a moat :P

 

Icahn has complained that MSD started a PC price war this year to lower earnings, thus helping his case for a buyout

 

Meg Whitman complained that Dell with dropping prices on servers to sell more. Looking at the Dell gain in marketshare in servers and the loss in marketshare in PCs, it is more likely that the price war is on the server side.

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  • 2 weeks later...
  • 2 weeks later...

http://www.bloomberg.com/news/2013-09-09/icahn-gives-up-dell-fight-while-saying-offer-too-low.html

 

Billionaire Carl Icahn gave up his fight to control Dell Inc. (DELL), saying he continues to oppose founder Michael Dell’s $24.9 billion plan to take the company private because it undervalues the computer maker.

 

Dell and partner Silver Lake Management LLC sweetened their takeover proposal last month, offering a dividend of 13 cents a share on top of an already increased $13.75-a-share bid for the computer maker. The price is still 70 percent below the stock’s 10-year high of $42.38, Icahn said in a filing today.

 

“I realize that some stockholders will be disappointed that we do not fight on,” Icahn said. “While we of course are saddened at our losing the battle to control Dell, it certainly makes the loss a lot more tolerable in that as a result of our involvement, Michael Dell/Silver Lake increased what they said was their ‘best and final offer.’”

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Guest wellmont

they changed every rule in the book to try to close this deal. in the end they needed a bod that was 100% in the pocket of the msd group to get it done. this statement by silverlake goes to my old adage ---don't listen to em. watch em.

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  • 4 weeks later...

http://www.statesman.com/news/business/dell-pc-shipments-tick-slightly-higher/nbKT2/

 

Whaddaya know, PC sales wasn't in indefinite free-fall after all...

 

To be fair, PC sales are still in decline.  Dell (and Lenovo and HP) increased sales at the expense of Acer and ASUS.

 

I think we're going to see a slower decline / mild growth going forward for two reasons: businesses will place a floor under PC sales, and because the tablet form factor will likely merge with the PC form factor for many applications.

 

Mildly related to this thread, I am now long HPQ ~ 10% of portfolio.

 

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  • 3 weeks later...

Quick questions:

 

1. Has Dell been effectively bought out?

2 Is it true that (1) the buy out price is $13.75 + $0.13 dividend, (2) the dividend record date has passed (there isn't a ex-dividend for some reason: http://www.dividend.com/dividend-stocks/technology/personal-computers/dell-dell-inc/) then (3) Why is the stock trading at $13.83 (>$13.75).

 

Should I dump my Dell shares tomorrow at $13.83 (or any value above $13.75)?

 

(I was hanging on, but if the buy out cannot be stopped anymore that's kinda pointless)

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it is still trading with the dividend, which will be paid at the close. it looks like the deal will close sometime in nov.

 

And after today's close it is trading even higher at $13.86 11 cents above the $13.75 buy out (0.8%). Is there any realistic chance left the deal will get denied? Is it even possible to block now? By whom even?

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  • 11 months later...

http://online.wsj.com/articles/michael-dell-going-private-is-paying-off-for-dell-1416872851

 

He's blaming "Wall Street" for the company's woes while public. I don't think 'Wall Street" wrote the check for all those terrible acquisitions:

 

"For example, in the past year we have made investments of several hundred million dollars in areas with significant time horizons, such as cloud and analytics, that might not have been feasible in today’s environment for public companies."

 

I seem to remember a battle with HPQ for 3Par that went for over $2.3 billion.

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