A new potential opponent to the proposed leveraged buyout of Dell by founder Michael Dell has emerged, in the form of none other than corporate raider activist investor Carl Icahn. On Wednesday, the special committee of Dell's board appointed to investigate the deal declared that selling the company would be the best option for …
The closest thing to a Wall Street Troll there can be. Shareholders should stop selling to him, and should stop listening his poison. He has shat all over the companies he's manipulated.
when rodents collide
What if the leverged buyout was a ploy by Michael Dell to sell 100 million of his shares at 13 bucks a share to a greater fool, as he winds down his position from 16% to naught.
A leveraged recap? Is he freaking nuts? He wants Dell to take out a huge ass loan just to pay a dividend. Short term moronic moneygrabs like this is what screws up good companies and kills jobs.
Remember from all the stuff about non-payment of taxes by various companies, one of the advantages of debt over capital is that it significantly reduces your tax bill.
Re: Leveraged recap
So does buying another company with a pile of debt but a decent cashflow, like say a large cable company (something like virgin media springs to mind, but AMD might also suit). I get what you are saying, but saddling a company that is beginning to need refocussing with debt which isn't reinvested into the companies future just seems harmful in the long run. Too much profit isn't a bad thing, it just needs to be invested right, depending on which margin you look at dell runs between 4 and 7%, now Apple, they have a margin. Dell is in the doing ok category.
How would this actually help improve the companies future? Sure it would pay less tax, but only because it was paying off the interest on a loan it didn't get to invest in its future. How about they grow the company and worry about the tax on the profits when they have the profits. Hell Dell could buy Sharp, that would be interesting, they could probably even buy Sony but that would make a bit less sense. That would return real long term value to shareholders. Pawning the company jewels for a quick cash fix has at best a very tenuous medium term benefit but in reality the benefit is to the shareholders who are short on Dell.
"A leveraged recap? Is he freaking nuts?"
It is kind of leveraged buy out 101. Buy a controlling stake in said company. Get said company to take out massive loans to pay out shareholders, meaning the leveraged buyout firms. If they can only get themselves called a private equity firm, they can also ask the Directors of the company, i.e. themselves, to pay consultants, i.e. themselves, huge fees to determine how to extract the company from the financial dire straights caused by debt obligations brought on by payments to outside investors, i.e. themselves.
Southeastern Asset Management
Aren't those the f*ckers that Jonathan Schwartz used to screw Sun over?
Re: Southeastern Asset Management
Never underestimate the power of the Schwartz !