Major Dell investor cashes in ALL of its 24.5 million shares Venture capitalist Blackstone's decision to withdraw from the bidding for Dell has spooked The Oakmark Funds into offloading its major stake in the Texan PC baron. The group of mutual funds owned 24.5 million shares or a 1.4 per cent holding in Dell, making it the seventh largest investor. Oakmark said yesterday that …
"This transformation into an enterprise player was supposed to take place away from the glare of Wall St, and part of the reason why the man Michael and VC pal SilverLake Partners bid $24bn for Dell the company.
That offer was branded "woefully inadequate" by Southeastern Asset Management, leading to rival bids being tabled by Blackstone and Icahn Enterprises."
..............by assuming (at the outset) that Dell and Siverlake's bid was an attempt to get the company on the cheap.
So what happened here is that Mr Dell made an offer that valued the shares at less than the going rate, everyone thought he was undervaluing the company, so blackstone made a higher offer, then got access to the real information and found out that Dell had been right all along, and got the hell out. Oakmark realised that's what was going on, and then realised that the likely result would be the current shareprice falling to the level that Dell the man was offering, and sold their shares first, whilst the price was still high. Good move.
Nygren has made only one big mistake in the last 15 years and that was investing in Washington Mutual before the financial crash. It was the biggest mistake for Oakmark by far and it really took their legs out for a bit in 2009.. Otherwise, he is a steady-as-she-goes, buy-and-hold type of investor who has had a very good track record the last 15 years and more.
We knew the world would not be the same. A few people laughed, a few people cried, most people were silent. I remember the line from the Capitalist scripture, the Free Market Theory. Dell is trying to persuade the Investors that they should do their duty and sell ownership at a lower price and to impress them, takes on his multi-armed buyout form and says: "Now I am become Death, the destroyer of wealth."
I suppose we all thought that, one way or another.
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