Dell Said To Be In Buyout Talks With Private-Equity Firms

puddingebola writes "Dell Inc. is reported to be in buyout talks with private equity firms. From the story, 'Dell is discussing going private with at least two firms, said one of the people, who declined to be identified because the talks are private. The discussions are preliminary and could fall apart because the firms may not be able to line up the needed financing or resolve how to exit the investment in the future, the people said.'"

Re:Schadenfreude

[vlm]

it could plummet if the buyout doesn't happen.

On a long term basis looking at the graph it drops in half semi-permanently each recession, so its about to plummet again anyway.

The question is why do a buyout now at current prices when you're sure to pay less in the future?

As for why go private, if you don't plan to ever expand / require capital ever again, you don't care about access to the stock market to raise capital, you've got to balance long term the costs of the buyout vs the permanent drain on finances of being a public stock, SOX compliance, the various fees, accounting expenses, last but not least idiotic demands from "the market" for exclusively short term (like the next quarter) profitability. I suppose the idea of Dell expanding is kind of unlikely in the near to medium term future. Maybe they have a chance for sales during the Y2036 problem in just 23 more years. Till then if the price drops in half every couple years at each recession...

From the inside

[Saint Dharma]

Up until May of last year, I worked at Dell as a help desk support representative for one of their clients. IMHO, Dell is in trouble because they have stopped innovating. They've put no effort into making a tablet PC that is as good as what any of the competitors offer, and instead of keeping their technical support focused on supporting their products, that have instead decided to diversify and provide support for companies like Boeing who needed help with their infrastructure and were more willing to sack their entire IT department and get it at a cheaper cost. Nothing new here, no sir.