Maneuvering Continues For Control of Dell 57
An anonymous reader writes "Just as Carl Icahn's months-long, high-profile bid for control of Dell seemed to have run its course, came the announcement that Dell's board had postponed a shareholder's vote on the bid from Michael Dell and investment firm Silver Lake Partners, to take private the company that Dell had started in a University of Texas dorm room twenty nine years ago. The postponement indicated that Dell was not confident that their $24.4 billion ($13.65 per share) deal had the necessary votes. Icahn and his main ally, Southeastern Asset Management, claim that the proposed deal undervalues the company and its upside potential; Icahn's latest proposal is to keep the company public, but to offer $14 per share plus upside warrants, for every share tendered by stockholders. The latest wrinkle is apparent tension within the Dell/Silver Lake team; Silver Lake reportedly feels entitled to the $450 million buyout fee specified in the deal's language, if any alternative bid from Icahn succeeds within a year; Dell and the board feel that Silver Lake would only be entitled to expenses in that case, perhaps amounting to a few tens of millions USD. The Bloomberg story also reports that Michael Dell has at times been unable to reach his Silver Lake counterpart (a longtime friend) on the phone to discuss possibly sweetening the bid."
What I would do if I was in charge (Score:5, Funny)
Sarcasm is not what it was (Score:2, Interesting)
I'd shut it down and give the money back to the shareholders.
Ironically that is exactly what Apple did with iBonds. Foolishly for exactly the same reasons pursuit of short term profits over market share (long term profits).
Its odd that Apple fans remember this but fail to remember the young Jobs scathing comments regarding this very strategy when it was still a computing company...and then proceeding to follow the same path in his reinvention of Apple as an electronics company.
Re: (Score:1, Interesting)
Worry not, now that he can no longer do his stage shows people will begin remember what he did in life. As is common with dead and visible persons. Eventually he will be seen in the same manner Bill Gates is. A nigh-useless dweeb that preached good practices and in almost the next breath proceeded to threaten litigation and other things I'd rather not post so as to preserve my decent mood. Eventually the fine folks like Woz who made Apple what it is, with Steve overworking him and selling features he did no
Re: (Score:2)
More details about the "powerful BASIC interpreter".
There obviously is Integer, then later AppleSoft (licensed from Microsoft).
How are those not as powerful as other BASICs available at the time (esp AppleSoft, since it's almost the identical BASIC used in other computers of the time).
Re: (Score:2)
Steve Jobs was responsible for Apple's 2013 bond issue? They've got better tech than I thought.
Acquisitions take time to assimilate (Score:2)
Steve Jobs was responsible for Apple's 2013 bond issue? They've got better tech than I thought.
http://www.forbes.com/sites/richkarlgaard/2012/12/10/steve-jobs-warns-apple-dont-be-greedy/ [forbes.com] Steve Jobs 1995 "What ruined Apple was not growth They got very greedy Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible they went for profits. They made outlandish profits for about four years. What this cost them was their future. What they should have been doing is making rational profits and going
Re: Sarcasm is not what it was (Score:2)
Re: (Score:3)
Why the hate for iBonds? Is it a general dislike of debt or is there something specific?
Apple did need to return cash to its shareholders. Apple was basically borrowed at the bottom of the market for next to nothing. If inflation gets back to something normally then less than nothing. (as an aside, Apple should not have done a stock buyback – it’s stock was overvalued.)
Re: (Score:2)
That is a fair question and trying to figure out if a stock is undervalued / overvalued is subjective. However, when the bond was issued Apple’s stock was higher – now it lower - so the general consensus of the stock market has spoken – Apple’s stock was overvalued.
Specifically, if Apple’s had bought stock at $600 that is now worth $425 – that would have been a bad move for Apple’s shareholders. Now, we do have the benefit of hindsight which is kind of cheating, but
Re: (Score:2)
On what planet is a stock with a P/E ratio of ~10 overvalued?
When the profit margin is unlikely to be sustainable.
Re: (Score:1)
If everybody knows that the profit margin is unsustainable, why hasn't the stock price corrected?
Or are you saying that the market is wrong when you disagree with the market, and only right when you agree?
Re: (Score:2)
If everybody knows that the profit margin is unsustainable, why hasn't the stock price corrected?
A low P/E is a market correction.
Hate is too emotive (Score:2)
Why the hate for iBonds? Is it a general dislike of debt or is there something specific?
Why would I hate that? Peoples language has just got so weak. iBonds were simply a way of limiting the damage of its falling knife share price. It has been fairly stable since...although we will see what happens after this quarters announcement in a couple of days time.
The reality is though I would have rather have seen Apple doing something interesting with their money instead of giving it back to shareholders (and attracting unwanted Government attention for not even paying token tax). Like in context of
Put that comment down (Score:4, Interesting)
I'd shut it down and give the money back to the shareholders.
Ironically this was from a time when Apple had failed while wintel had won. Leaving Jobs begging to Microsoft resulting in a settled lawsuit a few million in the bank...and a crippled office port. It only sounds stupid in retrospect because Apple from that dark time (A time I repeatedly point out its returning to), by reinventing itself, doing exciting things, leading in new markets. It became something different...better.
The World has changed since then Wintel are bleeding the PC industry dry with Microsoft & Intel cashing on on 70% gross profit margins...in the Desktop Apps(The Desktop destroyed by Microsoft...living on only in name...Windows) market that is not sustaining it...and Dells slice of the pie (and the Pie) is shrinking...The Days of Dell earning more money than Microsoft are long gone.
This move is about Dell reinventing itself doing exciting things, leading in new markets without the quarterly shareholder distractions (allegedly) , Something Apple is going to learn from in 2 days time.
Hopefully they will have the good sense not to be remain reliant on Wintel.
Avarice (Score:2)
I also feel entitled to $450 million for doing nothing.
Gimmee!
Comment removed (Score:5, Funny)
Re: (Score:3)
Probably better for us than Icahn's financial sociopathy.
Re: (Score:2, Interesting)
Dell is the bad guy here, people. I hate to say it, but Ichan is right.
It is kind of a myth that Ichan is the driving force behind the shareholder rebellion; he is just a cheerleader. The driving force is a company called Southeastern Asset Management. They are the ones who filed a motion protesting the MBO just days after it was anounced, they are the ones who have been organizing proxy votes and trying to stop the sale. It is also very hard to portray Southeastern as the bad guys: they are the kind of
Re: (Score:1)
Icahn makes as much money as possible by shutting down Dell, selling its assets to competitors and running up debt to inflate its share price via increasing cash on hand and cutting expenses.
With no assets you have no product and you are done in which Icahn sells all the shares to smucks like you who think he is out for you and the other shareholders when in reality you got screwed and he is laughing all the way to sunset with billions in cash.
Why don't you ask AMD how will its doing after sellings its cpu
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Parent post should be scored above zero.
Lining up billions in financing is no trivial activity and having that money ready to invest costs money. From the details, it's hard to know if Silver Lake pays the cost to keep that money on tap and this is part of covering those costs or if this is purely a reward for lining up several billion dollars.
My guess is it leans heavily towards the reward side with investors being promised returns equal to cash elsewhere in the market until the deal goes through.
Knowing
Re: (Score:1)
If I were Silver Lake I would sell to Icahn too!
Immediately higher return plus more money in 6 months when he closes Dell and sells off all its assets for billions! Maybe not ethical or wise for long term investment but great for a quick buck in a quarterly market.
The problem is stocks were once 30 year investments and under that guise you would be retarded and suicidal to do what Icahn does. However, computer programs and millisecond holdings are the cream and crop of the market today. Icahn is really grea
Re: (Score:2)
I have to believe there's a rump business left at Dell selling to the business market, at least that portion of the market not served by IBM global services and other similar companies.
I work in SMB IT and I see Dell 4:1 over HP (it used to be closer to 1:1, but HP has been retarded for the last 5 years) and there are few competitors besides HP for that business.
It starts me thinking that maybe HP and Dell should merge. They would be the last US full-line PC company, selling notebooks to servers. HP has
Re: (Score:1)
To me this is not about business.
It is about vultures taking advantage of a lower share price to raid the company and sell its assets for a quick buck. The PC market is dying (albiet not dead for a long time but in the eyes of wall street if it does not grow it is already dead and time to cash out.)
Intel too is coming with huge losses too as people are switching to tablets and SMBs shoot they just discovered they can stick with a browser and platform for 10 years without upgrading! That is lost revenue as p
Re: (Score:2)
Lenovo could compete on laptops, but that's it
I don't know about that - their Think branded workstations are very nice. All Think branded support is still tightly tied to IBM, and there are rumors about more integration with servers in one way or another. Besides, I'm not sure there's a compelling reason to treat Lenovo Think workstations and IBM servers as different - again, the support portal for Think workstations is the IBM portal I use for the IBM servers. The Lenovo bios feels just like the IBM deskto
Worked example of the importance of namespaces (Score:1)
Does anyone else think this whole sage would be much simpler if the media consistently referred to people:dell or company:dell?
Re: (Score:2)
Meanwhile, where is the farmer in all of this? And why don't they ask him to insure the deal?
I hear he's out standing in his field.
As a Rule of Thumb (Score:2)
I have an idea (Score:3, Informative)
So if you're reading this and thinking "hey, I buy from Dell all the time!" first of all, look at your hardware failure numbers. Secondly, fire yourself. Third, note that last time a business I was contracted to work at for a computer replacement project ordered 120 Dell laptops ($800 models btw), 20 were RMAed right out of the box with hardware defects. I guarantee that cost Dell more than it would have to simply build them all with good parts in the first place.
Corporate Love (Score:2)
Anyone wanting to buy Dell should have to set up and use one of their awful products for 1 day
Ignoring the usual awful *car* analogy...I mean why describe one industry secondary I do understand with an analogy of one I don't. I bought a Dell monitor recently. It is a no frills,with money off trade in...and was head and shoulders cheaper than anything else in the market, and on the whole perfect.
That said every single person. I have ever spoken at Dell, was unpleasant and wanted to transfer me to someone else as soon as possible. Now here is the thing. that has become the behaviour of *every* company
Re: (Score:2)
Re: (Score:2)
I have ever spoken at Dell, was unpleasant and wanted to transfer me to someone else as soon as possible.
Hmmm, it depends on the company, and what you're trying to do. Call Ally, or Lenovo Think branded support, or Frontier line support, or Sears service ... I've often been the one rushing off the phone (not that they're wasting my time, just that they aren't rushing me off either).
Maybe you're unlucky to deal with bad companies? I'm not saying that many or even most companies are crap on the phone, but I
Re: (Score:2)
Re: (Score:1)
Dell PowerEdge servers are among the best available. The R620 is a freaking beast. Equallogic & Compellent are both industry leading SANs. We have about 3000 Dell computers, OptiPlex 3xx, 7xx & 9xx lines, and Latitude D & E series laptops, and our annual failure rate is under 1%. We lose way more systems to physical damage than we do to hardware failure.
On the business side, if you pay for it, their support is amazing. If you want amazing free support, dream on. If that's something you val
Re: (Score:2)
Re: (Score:2)
Wow, I guess it depends, but Dell PowerEdge servers are the bane of our existence. Inability to get clear answers from the website or phone support on CPU upgrades (to go from single to dual), weird reproducible hangs seemingly due to BIOS, painful BIOS upgrade procedure.
We are extremely happy to have replaced them with IBM System X servers. All around much better experience, and we don't have to pay extra for good support - all included in the purchase price. The "savings" of Dell are often in getting rid
Re: (Score:1)
Re: (Score:2)
Not answering calls? (Score:3)
What is the future of Dell? (Score:2)
What exactly is the future of Dell, anyway?
Kill off all of the consumer business and focus solely on the business market (presumably excluding the very large enterprise market where Dell can't complete with traditional consulting companies like Accenture or highly integrated solution providers like IBM)?
It seems like the consumer market is what is collapsing more so than the business market. Tablets may replace or string out the lifecycle of consumer PCs, but they're an adjunct if used at all in businesse
You want profit? Give the company to me. (Score:1)
I've had over ten years of watching you and I know exactly where you're fucking up.
You switched horses in the middle of a race (Home-based vs portable)
You should have established dominance in the PC market, then used that to make a PC-based tablet.
But you didn't wait for said dominance, and now you're floundering.
I told you six years ago. Should I release those e-mails to embarrass you further?
I'm waiting, Dell.