Michael Dell told a conclave of moneymen on Thursday that he has considered taking his eponymous PC maker private. This off-the-cuff revelation was in response to a question from an analyst at Sanford C. Bernstein's 26th annual Strategic Decisions Conference in New York City. According to Reuters and others, Dell answered "Yes …
Take Your Advice to Steve Jobs
Dell should take his own advice he gave Steve Jobs when Jobs returned to Apple......
"I'd shut it down and give the money back to the shareholders."
Once cheap, now overpriced
Dell PCs were once very good value for money. But they can't compete with Acer. Instead of attempting to make their laptops and desktops look sexier, they should go back to building grey boxes at a cheaper price point. Only the vain MacOS users care what their PCs look like, Windows users generally don't. Windows users just want the most compute power they can afford. The bland grey/black desktops/laptops were better built too than the modern "sexier" more delicate machines. It seems the more they try and tart up laptops the more fragile they become.
Very good point...
I was looking at an all-in-one in Aldi today, and very nice it was to. But how do you update it? You probably dont, as its an appliance. If its an appliance it needs an appliance OS. Im not convinced that any of the MS offerings does that job better than OSX.
Given the stock is shown as being $41.29 the week of July 11, 2005 and now $13.24 the week of June 1, 2010 I'd say Mike needs to do rather a lot more thinking, but maybe not aloud. HP closed at $46.05 and Acer at $79.50 on June 4, 2010. Yeah I'd say Mike has pretty well mucked things up for the company pretty well.
In the stock market it's usually best to buy low and sell high. If Mike is considering buying back all outstanding shares he obviously has the idea of paying the very least he can per share. Frankly I'll be glad to get rid of mine, it's turning out to be a dead end investment and I'm sick and tired of his poor performance.
Maybe if the product was better "going private" wouldn't have to be on the table so to speak. The company from which I retired in 2008 had 20,000 desktops world wide and most of those were Dells. But an 83% failure rate for HDDs helped the shift to HP. Just one more nail in the coffin for another computer geek who grew to big for his britches and never understood the business world.
Do you have the slightest idea how stocks work? The share price is irrelevant without knowing the number of shares issued.
You can look at how a share has fluctuated, i.e. down 2%, but you can't make a comparison just from knowing dell is down 20p and HP is up 20p, it's apples and oranges.
As for Acer, yes they are priced at $79.50 - that's Taiwanese Dollars, so actually $2.47 USD. Again, you can't make comparisons just from that data.
Dell, and the corporate market
They've lost the plot in most of the corporate market too. Because Dell are largely disconnected from most of their buyers, most of the prospects don't know the product range and more importantly don't know what high value (high margin for Dell?) services to add on. I suspect most don't even know Dell can do custom PC imaging (the site where I am at the moment doesn't).
Dell's better salesfolks may try to spread the word but the weekly targets were still tin-focused last time I checked.
So the mid to large size corporates who could benefit from AND PAY FOR a managed desktop rollout don't know that Dell UK (allegedly) have ways and means of using resellers (yes they have them) to deliver a managed rollout of a few dozen PCs a day in a corporate.
Way to go, Mikey.
So, he buys Dell, and when he gets it home discovers that not everything he was expecting was in the box, or the advertised software is a trial version.
He then has to call customer service and try to get his money back.
Good luck with that, Micheal, tell us how you get on.
Paris. just because (TM).
I think more companies should in fact go private. Some hove, I think It would make the corporate world less vulnerable.
HP and Acer passed Dell using acquisitions and mergers.
Dell's core PC business only added the insignificant revenue of Alienware. HP took on Compaq (with DEC) and Acer absorbed Gateway (with eMachines) to jump ahead of Dell in revenues.
Needed to get a Dell SAS Raid 5 I/I card from Dell no option to have express delivery so waited a week for it. Not good.
The original one had a bad capacitor. The new one has a better black capacitor.
So my advice is if you buy a Dell server get two (one for parts)
there really is no difference in the USA at least for corporate/private.
Computer manufacturers (I believe dell fits right in with this) have benefitted from tax breaks and tax exemptions here in the US for hiring locally and building local infrastructure.
The companies of course have an agenda and the agenda is to cut back and time goes on but continue to keep their handouts from the taxpayers.
I want to say I recall a situation like this with dell in the mid-west where they dramatically slashed their workforce yet wanted to keep all the deep tax breaks they were getting as a result of hiring them to begin with.
What's the difference if the company goes private in that regard. They still need people.
Chysler is private, didn't the taxpayers just give them money because the investment firm behind it said they didn't want to lay that debt on the shareholders doorstep knowing it was goign to be a loss.
Companies being propped up by the state ?? That sounds very much like the USSR.
Better give the money to a 19-year old so she can get a good education and later good jobS. (yes, the "S" is important).
Yes let's turn this into a bitching session about the bad PC we got once
Or maybe talk about the corporate aspect the story is about?
Private vs. Public
I think Michael Dell taking the company private again is an excellent idea. Having worked for a lot of publicly traded companies I have come to the conclusions that a company's growth and quality really starts to decline shortly after it begins trading publicly.
With a publicly traded company, the CEO is designated by the investors holding controlling interest in the company. Said CEO is required to take direction from the company's chief investors. Investors all too often have no real idea what is actually good for the company. They tend to be driven purely by short term quarterly gains. This leads to the CEO having to do thing he or she knows will ultimately harm the company's long term viability in order to justify his job to the company's chief investors. So every quarter is spent scrambling to meet the projected quarterly gains so that the stock price doesn't fall. While this is not invariably the case, my impression is that it represents the general rule.
Back when Dell was founded, its direction was singular. Michael Dell knew what he needed to do to grow his company. Once the company started trading publicly, even though he is the chief investor, he is still subject to the pressure of having to sacrifice long term profitability in order to keep the stock price from falling. Going private again allows Dell to make the decisions it needs to make to return to its true glory days.
I personally feel this way about all publicly traded companies. It really upset me when Newegg announced their IPO. To me it means the quality of service will start to level off and eventually start its long fall to obscurity.
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