Dell finally takes Dell private - with $24bn and help from Microsoft
Stumbling computer-maker Dell Inc will leap from the stock market and go private in a $24.4bn buyout. Ever since Michael Dell founded the company in a dorm room at the University of Texas in 1984, the firm has enjoyed a fabulous ride. But it struggled this side of the year 2000 as the PC lost its lustre. The tech titan then went …
This topic is closed for new posts.
Re: Who's panicking?
Agreed - you don't loan money without a premium on the perceived risk. Or something else in return...
A Loan from MS !
When you sup with the Devil, use a long spoon.
I hope Michael Dell is well versed with Faust.
@Carlton Browne - Dell has seen the writing on the wall (Windows 8 a disaster, ditto Windows 9) and he is selling out. If Dell are going down the drain, then MS's money is as good as any. They over paid for Aquantive, Skype and have given Nokia a fortune to self destruct (and an ongoing billion a year, but they hope that they will get much of that back from their patents).
Windows 9 is a disaster is it? Riiiiiiiight. I'll ignore the fact it hasn't even been announced yet......
Windows 9 is a disaster
"Windows 9 is a disaster is it? Riiiiiiiight. I'll ignore the fact it hasn't even been announced yet"
Windows 7 was basically Vista Service Pack 2. They cleaned up some of the bugs in Vista, basically. It took them two years or so. But you can't do that with Windows 8 because it's got two UI's which is a fundamental problem rather than a code tidy-up issue. It wants to be a touch device on a desktop.
So how is the Windows division doing then? The old gaffer, Sinofsky, got fired for being a threat to Balmer, and two clueless MBA ass kissers (A Julie and another no-name) have replaced him. So I wonder how this is going to turn out!
Windows 9 will either a) try and be Windows 7 again (by which time MS have wasted another half decade achieving nothing whatsoever) or they will continue the Metro-isation of the UI.
Either way, Windows 9 will be a disaster. You don't need to have a Crystal ball to see it.
WINDOWS 9 FAIL
Re: Windows 9 is a disaster
No.....Vista Service Pack 2 was called......Vista Service Pack 2. I have installed on a machine at home, and very stable it is too. Pretty quick too, but that's a separate discussion.
Now we have the glaring factual inaccuracy out of the way, lets have a look at the rest of the drivel you have come up with. Ah, you're attempting to predict the future and passing it off as fact, as your predictions fit your ideals. Or, as it's otherwise termed, making it up as you go along. Ever thought of a career in Climate Science?
Dell is a weak player in a tough market, and my uneducated guess is that MS stuck a fork in it to stop other major players carving a big hardware firm for peanuts when it files for Chapter 11 in a couple of years.. The companies who could afford to buy Dell with their chump change are all capable of putting a big stompy boot into MS's profitable market segments. A firesale of the physical assets would probably cover the cost of the deal going tits up, and the bonus for MS is that they can lock Dell into Win8 at a time when all the other big OEMs are giving it a big "meh!". The stock will probably find a nice soggy median now that there's hard money behind it.
Is he going to shut it down?
He should take his own advice he gave about Apple in 1997..
"What would I do? I'd shut it down and give the money back to the shareholders."
Re: Is he going to shut it down?
Hell, I was wondering if he terminal cancer and wanted to fuck everyone in the world at once.
What a better way to do it than a loan from Microsoft.
Loans from Microsoft
...because a Microsoft loan/investment worked out so badly for Apple...
Re: Loans from Microsoft
@AC - the apple case was an attempt by MS to get the DOJ off their backs. "hey, we are being nice to our weakling competitor". It was a politically motivated move.
The loan to Dell is different, it's about stopping Dell flirting more and more with non-MS products, namely Chrome OS and Linux (desktop and server).
MS will cause DELL to perish if they succeed in this. A new competitor will replace Dell, much like Samsumg displaced Nokia once MS got it's claws into Nokia.
Dell is done
Dell has been on the decline for awhile. It's just a matter of time before the chattering class realize it. Eadon is right, they're definitely on a Nokia-like glide path to oblivion. Still, I've got no problem with MS getting the blame.
As for open source, Dell has always been ambivalent about it. Up until a week ago my main workstation at home was an old Dimension 5150n running Scientific Linux. They had a great idea with the n series machines but obviously caved to pressure from MS as the whole netbook industry did. That's now been replaced by a Lenovo ThinkCentre that really is a well designed piece of kit. When time comes to refresh the kids' machines I'll probably go with Lenovo, particularly if I can pull off getting them to accept Linux as their primary OS.
How's it work?
What if not everyone wants to sell? Do they only have to get a majority and can then force everyone to sell? Will every single share owner get a letter asking them about this?
Wouldn't it make sense for DELL to come up with a few bits of REALLY bad news to depress their share price first...?
Re: How's it work?
Yes, he only has to convince a certain percentage (I don't know how far above 50% it is).
If he does 'something' to affect the share price, he gets investigated by the SEC. and Silverlake send a couple of guys around to break his arms and legs.
Re: How's it work?
He is buying at roughly the lowest share price ever if you take off the 20% premium....
Dear El Reg...
Please get rid of the pop-over ads, and please tells ArcServe that, because their ad selfishly blocked my reading of this article, this reader - who signs off on a very large infrastructure budget - will now never use their services.
Lawyers and shoes
So, do they all wear white shoes at the law firm?
Dell buying himself
If Dell keeps buyinhg himself, he's gonna go BLIND!!
Or...
Michael Dell is actually doing the smart thing, and is trying hard to divorce the fate of the company from the current vagaries and shenanigans of Wall Street.
This is just crystal ball-gazing, but as a private company Dell comp. can deploy strategies that are far more riskier (or gutsier, depending on taste) than your avarage datacenter algorythm is familiar or comfortable with. It also prevents the company, which in and of itself is still healthy and profitable, from being shredded up by a stock panic.
There's some serious money involved here, and Michael Dell is not a st00pid man. Despite Eadon's hearty and amusing screams, I have a feeling there's an actual long term strategy behind this move. A risky one that goes against the grain of common business practice, but which might well pay off.
As always, only time will tell.
Silver Lake..?
Be afraid Dell employees, be very afraid.
Silver Lake SCO and MS ..
"An alert reader noticed that Integral Capital Management companies just filed a 13G with the SEC regarding its shares in SCO .. As of last December, Integral Capital Management V didn't own any SCO stock, according to this SEC filing. They did own Microsoft stock back in November. But they didn't the previous May of 2002. So the chain of investment timeline appears to go like this: First, they invested in Drugstore.com, then Microsoft, and then in SCO".
"Small world, isn't it? But why? A venture capital firm is investing in Microsoft? Doesn't it seem like it should be the other way around?"
"In 1999, Integral Capital Partners co-founded and now operates as a managing principal of Silver Lake Partners, a $2.2 billion buyout fund focused on technology and related growth businesses", link
I think Eadon has failed to consider how much profit Dell makes in a year. Paying that loan off will be relatively simple for a company that is spending billions buying up companies every year.
He has stood up to the investors and decided to go his own way with the company I doubt he will suddenly bow down to Microsoft. That would be just silly and a waste of his time changing one devil for another. It looks like he wants to move the company without having to answer to anyone and that can only be a good thing. I fully expect him to keep going with the move into solutions provider as there is a lot more profit involved and the market is massive and worth hundreds of billions to any company who can carve themselves a slice of the pie.
As an FYI Michael Dell wants to sell more systems with Linux not less.
I doubt he wants to sell more systems with Linux at the expense of Windows systems. They make more money on Windows per server shifted.
Dell, a one-trick pony?
It's curious as to why Dell haven't previously branched out into other devices years ago, such as the Blackberrys, iPods and games consoles ...
Dell has no where to go but services
@randommagic Dell is a desktop player and that wave is going back into the sea, at least whilst MS still dominates the desktop (albeit less so each year). So the only way Dell can grow is by selling more stuff to datacentres and selling more services. That means moving even further away from Windows and towards Linux (more so every year).
It is sensible to ask, then, why would MS give a loan to a company to sell Linux based systems and services? That does not make sense. MS usually do deals that are designed to suppress Linux and increase Windows business (or at least slow down its decline).
The first thing Mr Dell needs to do is get back to their original core values. Thats direct selling only and a focus on quality.. The quality has certainly gone out the window just like HP even if it has improved again a small amount in the last few years its still not anywhere near what it used to be (I am looking at you Optiplex and Vostro series SFF desktops!).
Thing is I can't see them ever focusing on hardware again noww they have made such a push into the services and software areas.
This could break Michael Dell.
According to BBC, this deal is about Michael Dell maintaining control in face of opposition from shareholders who don't like the way he is running the company.
If the banks who are backing him now aren't happy with future results (and Dell is in the wrong place in the business right now) they might eventually pull the plug and sell the assets, leaving Dell as a creditor (to the tune of the fortune he has spent in this manoeuvre).
This topic is closed for new posts.
