“Dell Inc’s Michael Dell revealed on Thursday he had once considered taking the company he founded private, sending shares in the No. 3 PC maker surging as much as 6.4 percent,” Gabriel Madway reports for Reuters.
“The comment caused the stock to spike a half-hour before the market’s close on speculation about a buyout premium, but analysts said many pieces would have to fall in place for such a deal to happen,” Madway reports. “Kaufman Bros analyst Shaw Wu said Dell going private was not out of the question, but said it would take plenty of outside financing and would not change the company’s structural problems or necessarily improve its ability to compete with the likes of Hewlett-Packard Co. and Apple Inc.”
“According to data compiled by Thomson Reuters, Dell is the largest single shareholder in his namesake company, with an 11.6 percent stake,” Madway reports. “The company has been shedding jobs and cutting costs as it focuses on profitability over growth, and Dell has been trying to diversify its business away from its core of low-margin PCs. But PCs still account for roughly half of the company’s revenue. ‘I think this is a company that can grow its operating income in dollars pretty substantially and that’s our intent,’ Michael Dell said at the investors’ conference.”
MacDailyNews Take: On October 6, 1997, in response to the question of what he’d do if he was in charge of Apple, Dell founder and CEO Michael Dell stood before a crowd of several thousand IT executives and answered, “I’d shut it down and give the money back to the shareholders.”
Here’s a brief history lesson for Mikey:
• Apple now worth more than Dell – January 13, 2006
• Apple now worth double Dell’s market value – July 27, 2007
• Apple now worth triple Dell’s market value – December 06, 2007
• Apple now worth quadruple Dell’s market value – May 01, 2008
• Apple could buy Dell outright; Mac-maker has more cash on hand than Dell is worth – October 21, 2008
• Apple now worth quintuple Dell’s market value – February 12, 2009
• Apple now worth sextuple Dell’s market value – October 20, 2009
• Apple now worth seven times Dell’s market value – January 26, 2010
• Apple now worth eight times Dell’s market value – May 21, 2010
• Apple now worth nine times Dell’s market value – June 01, 2010
So, seriously, who cares what Michael Dell “thinks?” Whatever he “thinks,” the opposite is likely to happen. A schlock PC box assembler is a schlock PC box assembler.
Madway continues, “In 2009, Dell made its largest acquisition, buying technology services provider Perot Systems for $3.9 billion. When asked about the company’s future M&A deals, Dell said there is ‘not necessarily’ a high probability that the company would make an acquisition of more than $2 billion, instead focusing on smaller deals.”
Full article here.
[Thanks to MacDailyNews Reader “Les S.” for the heads up.]