With exactly a month to go before the special meeting of Dell shareholders that could decide the company's fate, investor Carl Icahn has increased the pressure for a better deal for shareholders – chiefly himself. In an open letter to Dell shareholders, Icahn said that he has now purchased 72 million shares of Dell stock from …
Going private is needed for Dell
For Dell to survive, they have to go private. It'll allow them to burn through a lot of middle management, shake up the company in terms of products and focus, and generally not be a loss leader anymore.
If sold to Icahn, there will be a payout to investors like himself, higher than what would be received by going private. The company would be put into more debt, and the company continue their downward spiral and will fail. Pieces of the business sold off and massive layoffs. More so then simply a management shake-up from going private.
So on one hand both scenarios get a payout to investors. However the greedy folks always want more. But only one of them will not involve taking on more debt to pay shareholders.
What a bullshitter
$13.65 is 2.5% less than $14 (13.65/14=0.975)so he wants folks to believe that 35c changes the offer from 'significantly undervalued' to a jolly fair price.
Re: What a bullshitter
In fairness, while 35c is chump change on only 1 share, if you own 72 bazillion shares, that's a couple tens of bazillion dollars (25.2 million to be exact based on the numbers in this story).
Re: What a bullshitter
Yes, and Dell's proposal would force the external shareholders to tender (sell) their shares at $13.65 per share. If you bought them at $22 and think Dell is going to turn around, you probably don't want to sell your shares. Icahn is offering them the opportunity to retain their investment in Dell and just vote with him... or sell out for $14..... I don't disagree in general. Icahn is clearly out to raid the company, that is what he does, but there are reasons you might not want to sell to Dell/Silver Lake even if you think their proposal will be better for Dell in the long term... namely, you wouldn't benefit from a long term turnaround because you would have sold your shares.
Beardy Branson getting the same flack when he wanted take virgin airlines private again, and he was proven right to do it his way, I feel Mr Dell has the company at heart, not the short term gain
Re: I feel Mr Dell has the company at heart
I'm a cynic so I'd say his pride rather than the company. But for consumers and workers at the plant, it works out the same way. If Ichahn gets his way they both get super shafted. Dell will almost certainly have to shaft some of them, but not nearly as many.
"In an open letter to Dell shareholders, Icahn said that he has now purchased 72 million shares of Dell stock from his allies at Southeastern Asset Management, making him the largest private shareholder after Michael Dell himself."
What is the point of Icahn purchasing the shares since if they're allied surely the combined ownership percentage stays the same?
Unless SAM is forming an exit strategy and trying to distance themselves from Icahn.
Like a rash this one is!
Paris because she knows how to get rid of them.
So now his "plus offer" is reduced to a mere 2.5% advantage? Hopefully investors can remember how Icahn has shafted everyone else and kindly refuse his offer. He's also at a loss as his previous bluff was called.
It's pretty possible that Icahn will lose this battle. Good riddance!
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