PDA

View Full Version : Dell to Return Funds to Shareholders in $24 Billion Deal to Go Private




MacRumors
Feb 5, 2013, 09:11 AM
http://images.macrumors.com/im/macrumorsthreadlogo.gif (http://www.macrumors.com/2013/02/05/dell-to-return-funds-to-shareholders-in-24-billion-deal-to-go-private/)


http://images.macrumors.com/article-new/2013/02/dell_logo-250x247.jpgDell today announced (http://content.dell.com/us/en/corp/d/secure/2013-02-04-michael-dell-silverlake-acquisition.aspx) that it is officially going private in a $24.4 billion deal that will see the company owned by founder Michael Dell and investment firm Silver Lake Partners. The deal also involves a $2 billion loan from Microsoft."Michael Dell is a true visionary and one of the preeminent leaders of the global technology industry," said Egon Durban, a Silver Lake Managing Partner. "Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company's transformation strategy to become an integrated and diversified global IT solutions provider."

Following completion of the transaction, Mr. Dell, who owns approximately 14 percent of Dell's common shares, will continue to lead the company as Chairman and Chief Executive Officer and will maintain a significant equity investment in Dell by contributing his shares of Dell to the new company, as well as making a substantial additional cash investment.Apple fans have been particularly interested in the fate of Dell since Michael Dell recommended in October 1997 (http://news.cnet.com/Dell-Apple-should-close-shop/2100-1001_3-203937.html) that Apple be shut down."What would I do? I'd shut [Apple] down and give the money back to the shareholders," Michael Dell said before a crowd of several thousand IT executives.At the time, Dell was surging to become the world's top-selling PC manufacturer, but it has since faltered and now stands as the third-largest manufacturer as HP and Lenovo now battle for the top spot.

Today's move is of course far from a shutdown for Dell, but Apple fans may take a certain pleasure in seeing the company turn private and return funds to shareholders as it continues its efforts to revitalize the Dell brand in a stagnant PC market.

Article Link: Dell to Return Funds to Shareholders in $24 Billion Deal to Go Private (http://www.macrumors.com/2013/02/05/dell-to-return-funds-to-shareholders-in-24-billion-deal-to-go-private/)



maflynn
Feb 5, 2013, 09:12 AM
While it was no secret, since word hit the streets a couple of weeks ago, its still quite shocking to see.

Hopefully they'll turn it around. I hate to see any company fail; We're talking about people's livihoods and their ability to support their families.

From Engadget (http://www.engadget.com/2013/02/05/dell-going-private-ms-loan/)

The rumors were true. Dell has announced that it will go private, assisted by a $2 billion loan from Microsoft. The full deal between stockholders, Michael Dell and investment firm Silver Lake is being valued at around $24.4 billion.

I wonder what the terms of the loan are and what's MS' expectation. Rumors were swirling that Dell was going to push harder into the Linux sector perhaps now they'll focus more attention on windows since MS lent them a boat load of money.

Megagator
Feb 5, 2013, 09:14 AM
I wonder what Microsoft wants with Dell.... Maybe finally get into the computer hardware business and sell 100% Windows computers?

applesith
Feb 5, 2013, 09:15 AM
I guess Dell didn't get the memo about the Post-PC era.

JaySoul
Feb 5, 2013, 09:16 AM
Dell should hire Adele for a commercial.

Squilly
Feb 5, 2013, 09:16 AM
I didn't even know Dell was doing that bad... You see Dell's everywhere. A $2 billion loan says something though.....

pancakedrawer
Feb 5, 2013, 09:17 AM
Hopefully this will allow them to become more innovative and increase competition.

shanmugam
Feb 5, 2013, 09:18 AM
I do not really care about apple vs Dell fight.

not sure how many going to lose their jobs; is it good or bad?

ProVideo
Feb 5, 2013, 09:19 AM
It's too bad Jobs isn't still around to mass email this info to all employees.

Rocketman
Feb 5, 2013, 09:21 AM
If Apple were to go private today it would be a $550B LBO. Since most shares are not owned by insiders, which is different from Dell, it would be more difficult to go private at all. However it would be possible for Apple and Braeburn to get considerable leverage, both bank and brokerage, buy back its stock in the open market and through dark pools, and make slow progress toward setting up a future go private effort.

If they were to buy back half the company at stock prices of $450-500 at $275B and assuming 4:1 leverage, the cash cost would be only $55B. Pocket change for Apple and Braeburn.

Although today's market cap is only $418B. Only 3x cash in bank.

Rocketman

Macrolido
Feb 5, 2013, 09:24 AM
This is worth a moment of reflection today.

basesloaded190
Feb 5, 2013, 09:25 AM
I do not really care about apple vs Dell fight.

not sure how many going to lose their jobs; is it good or bad?

They are going private, not out of business.

a0me
Feb 5, 2013, 09:30 AM
"I'd shut the company down and give the money back to the shareholders."

15 years later, Dell finally acted on his own advice.

sittnick
Feb 5, 2013, 09:35 AM
Silver Lake was the original code name for the IBM AS/400 mid-range computer line. ... Hmmm ...

johncrab
Feb 5, 2013, 09:41 AM
This is going to be another deal where the vulture capital firm hollows out and whores out a company, running up huge bills on its credit and then walking away as everything burns. It's just like a scene from "Goodfellas" except this is all legal. It's the beginning of the end for Dell and in six months there won't be a trace of production, support or anything else in the US.

GoCubsGo
Feb 5, 2013, 09:41 AM
That's a big move, really, and couldn't have been easy at all.

johncrab
Feb 5, 2013, 09:42 AM
"I'd shut the company down and give the money back to the shareholders."

15 years later, Dell finally acted on his own advice.

Yeah, I remember when he said that about Apple. Hehehehe. Payback's a bitch.

Truffy
Feb 5, 2013, 09:47 AM
"I'd shut the company down and give the money back to the shareholders."

15 years later, Dell finally acted on his own advice.
And
Yeah, I remember when he said that about Apple. Hehehehe. Payback's a bitch.
Yet
They are going private, not out of business.
That's the point, they're not closing down, simply freeing themselves of the analyst whores who do nothing but expect more. Good luck to them.

Bantz
Feb 5, 2013, 09:56 AM
I love my Dell laptop, i7 15inch and amd graphics for about 400 :eek:
They also make great servers

----------

It's too bad Jobs isn't still around to mass email this info to all employees.

Mass mail info that Dell sell more PCs then Apple? :confused:

Brian Y
Feb 5, 2013, 09:58 AM
And

Yet

That's the point, they're not closing down, simply freeing themselves of the analyst whores who do nothing but expect more. Good luck to them.

Agreed. Look at what these "expert" analysts did to Apple's last quarter. Their best EVER quarter by some margin, but because they didn't meet the results these "experts" predicted, they suffered massively negative reporting, and a massive drop in sp/market cap.

It's almost as if these analysts buy shares, over-up the predictions and dump just before announcements.

Muscle Master
Feb 5, 2013, 10:00 AM
And

Yet

That's the point, they're not closing down, simply freeing themselves of the analyst whores who do nothing but expect more. Good luck to them.

I'm gonna go ahead and say it

Dell is gonna lead the PC market in a few years followed by Lenovo leading in the business sector

robanga
Feb 5, 2013, 10:02 AM
Taking the public money to fund the rapid growth phases and then buying it all back once the situation has leveled out. We may start seeing this as more of a trend.

Really a good move for them and MS. Being public in the market today is a lot harder than it once was.

DavidLeblond
Feb 5, 2013, 10:04 AM
I remember when Dell use to make quality PCs. The PCs we've gotten out of them lately at work have been so bad we've had to drop them and go with Lenovo. Even the Dell repairmen that come by comment on how shoddy the quality is.

balamw
Feb 5, 2013, 10:08 AM
in six months there won't be a trace of production, support or anything else in the US.

Isn't that the path that brought Dell here?

http://en.wikipedia.org/wiki/Dell

Assembly of desktop computers for the North American market formerly took place at Dell plants in Austin, Texas (original location) and Lebanon, Tennessee (opened in 1999), which have been closed in 2008 and early 2009, respectively. The plant in Winston-Salem, North Carolina received $280 million USD in incentives from the state and opened in 2005, but ceased operations in November 2010, and Dell's contract with the state requires them to repay the incentives for failing to meet the conditions.[74][75] Most of the work that used to take place in Dell's U.S. plants was transferred to contract manufacturers in Asia and Mexico, or some of Dell's own factories overseas. The Miami, Florida facility of its Alienware subsidiary remains in operation, while Dell servers (its most profitable products) continue to be produced in Austin, Texas.

Used to be (pre ~2008) you could get a semi-custom Dell in a matter of days. When I last priced a Windows laptop and looked at Dell it was 7-10 days at best unless you took their default configuration.

B

ConCat
Feb 5, 2013, 10:11 AM
Dell should hire Adele for a commercial.

"Dude, you gotta get Adele"

newdeal
Feb 5, 2013, 10:13 AM
totally unrelated but while my Dell server is excellent I have never had a Dell laptop that was even half way decent. Their current notebook designs are terrible clunky, thick, heavy dinosaurs imo. They really need to hire a person to redesign their entire line of notebooks.

Macman45
Feb 5, 2013, 10:15 AM
While it was no secret, since word hit the streets a couple of weeks ago, its still quite shocking to see.

Hopefully they'll turn it around. I hate to see any company fail; We're talking about people's livihoods and their ability to support their families.

From Engadget (http://www.engadget.com/2013/02/05/dell-going-private-ms-loan/)



I wonder what the terms of the loan are and what's MS' expectation. Rumors were swirling that Dell was going to push harder into the Linux sector perhaps now they'll focus more attention on windows since MS lent them a boat load of money.

I don't get the MS angle either, Xbox aside, Microsofts attempts at hardware have been less than awe inspiring....Perhaps they feel that riding Dell will help to reinvigorate them in some way, but I'd sure like to see the terms of that loan too.

slffl
Feb 5, 2013, 10:18 AM
I didn't even know Dell was doing that bad... You see Dell's everywhere. A $2 billion loan says something though.....

It's not about revenue, it's about profits.

balamw
Feb 5, 2013, 10:19 AM
I don't get the MS angle either, Xbox aside, Microsofts attempts at hardware have been less than awe inspiring....Perhaps they feel that riding Dell will help to reinvigorate them in some way, but I'd sure like to see the terms of that loan too.

I think this:

Rumors were swirling that Dell was going to push harder into the Linux sector perhaps now they'll focus more attention on windows since MS lent them a boat load of money.

has a lot to do with it. Losing the locked in sales of OSes to the #3 PC manufacturer would be a big blow that even MS could not absorb so easily.

IIRC it has happened before. At one point Dell was pushing Linux on their netbooks and MS came in with a lower license cost.

B

slffl
Feb 5, 2013, 10:20 AM
Steve Jobs beat Michael Dell from the grave. I am so happy on so many levels, one of them being I hate Michael Dell and his right-wing politics.

a0me
Feb 5, 2013, 11:01 AM
I love my Dell laptop, i7 15inch and amd graphics for about 400
The Inspiron 15z Ultrabook + Touch, which is the model the closest to the MacBook Pro 15" in terms of hardware, costs about $1400...

BC2009
Feb 5, 2013, 11:03 AM
It is amusing to see Dell giving the money back to the shareholders because of his comments regarding Apple so many years ago.

However, right now the analysts are so down on Apple, it would be nice for them to be free of the analysts. Imagine for a minute that Apple averaged 25% worse than last year in profits over the next 10 years. Mind you they are projected to have a 71% increase in profits in the next 3 to 5 years.

Apple made over $40B last year. Their current market cap is $430B and analysts are still dumping on them. They have $130B in cash. At a rate of $30B profit per year, Apple would have enough cash in ten years to buy back all their shares at today's market cap.

The immediate response to something like that is "well, of course Apple's market cap will go up as their cash reserves increase". I agree with that, but one has to wonder why analysts are dumping on Apple and screaming "sell sell sell" when current profit projections have them making enough cash to buy back the most expensive and profitable company in the world in ten years' time.

On another note.... Amazon has made $5B profit in total in the last ten years. They've reported losses or near-zero profits in the past several quarters. Current 3-5 year outlook projects a 4% decline in profits. Assuming they doubled their profits from their first decade in their second decade they would make only $10B. Their market cap is currently 27% of Apple's ($118B versus $430B), yet even if they defied projections and doubled their profitability in ten years they would only make about 3% of the profit that Apple would make in the next decade if Apple experienced a 25% decline rather than the 71% projected increase.

Would you buy a money-printing machine that prints $1 per year for $118 or would you rather have one that prints $30 per year for $430? Think about that.

MJL
Feb 5, 2013, 11:37 AM
I remember when Dell use to make quality PCs.

I wonder when that was - it must have passed me unnoticed.

I remember the amalgamation of PriceWaterhouse and Coopers and Lybrand into PWC. One was using IBM, the other Dell computers. I also know the figures of the repairs Dell had to do and the figures of IBM repairs and it did not put Dell in a favorable light.

Having said this - I am quite happy with my two Dell monitors but they are the high end ones. (U2412M and U2713H)

Thana6tos
Feb 5, 2013, 11:41 AM
:D...... hahahaha....... poor Dell, was NOT that good to begin with. Oh well, their glory days are over.

MJL
Feb 5, 2013, 11:48 AM
Would you buy a money-printing machine that prints $1 per year for $118 or would you rather have one that prints $30 per year for $430?

Obviously you did not get burned in the dot com crash. Think about it.

Think about the peak and subsequent decline of the likes of Microsoft, Motorola, Nokia, Ericson, RIM amongst others. Have heard the same tribulations about those firms as that I have heard about Apple.

When has a half decent retailer gone broke?

firewood
Feb 5, 2013, 11:52 AM
Mass mail info that Dell sell more PCs then Apple?

Making Dell a small fraction of Apple's total profit.

Michael didn't totally shut Dell down, he just managed it into something smaller and less profitable before giving what's left back to the shareholders. Call it a partial shutdown. (What percent?)

TMar
Feb 5, 2013, 12:16 PM
I guess Dell didn't get the memo about the Post-PC era.

There is no such thing as the post-PC era. Anyone who believes that doesn't understand computers. It's not that people don't want or need computers but rather the fact that computing power has increased to the point where upgrade cycles are extremely long now. That is the reason for the sales slump the market has been in.

Gone are the days where upgrades provide dramatic performance improvements. The PC boom was happening when the internet was the driving force for those upgrades. An 5-8 year old computer is enough for what the vast majority of people do with one today.

These incremental upgrades are going to catch up to the phone and tablet market too in a few years and people are not going to need them as often. A few years after that the second hand market will be flooded with completely capable cheap devices and those markets will slump as well.

polterbyte
Feb 5, 2013, 12:16 PM
He's half-consistent with his own advice, at least. Now all he has to do to get full marks is to shut down his company.

DavidLeblond
Feb 5, 2013, 12:22 PM
I wonder when that was - it must have passed me unnoticed.

I remember the amalgamation of PriceWaterhouse and Coopers and Lybrand into PWC. One was using IBM, the other Dell computers. I also know the figures of the repairs Dell had to do and the figures of IBM repairs and it did not put Dell in a favorable light.

Having said this - I am quite happy with my two Dell monitors but they are the high end ones. (U2412M and U2713H)

I had a beige Dell something or other... it was a Pentium II. That lasted forever. Was the last Dell I've ever used that lived past a year old.

I also have a Dell monitor at home. No problems with it.

Renzatic
Feb 5, 2013, 12:27 PM
Think about the peak and subsequent decline of the likes of Microsoft, Motorola, Nokia, Ericson, RIM amongst others. Have heard the same tribulations about those firms as that I have heard about Apple.

I wouldn't rank MS in the same category as those other companies. They took a hit after the dot-com bust, but stayed almost perfectly stable and healthy from that point on.

If anything, I'd say Apple will more likely follow their trend moreso than RIM and the rest. They'll eventually get to a point where their stocks will take a good hit, but then plateau out with a slight upwards increase for the next 10-15 years.

gnasher729
Feb 5, 2013, 12:28 PM
Losing the locked in sales of OSes to the #3 PC manufacturer would be a big blow that even MS could not absorb so easily.

I think the number of PCs sold is quite independent of what any individual manufacturer does. If Dell stopped selling PCs today, all the others would sell more PCs. Very few people would not buy a PC because Dell stopped selling. If Dell stopped buying Windows licenses, the other manufacturers would buy more licenses.

joneill55
Feb 5, 2013, 12:29 PM
They are going private, not out of business.


Oh how the mighty have fallen :rolleyes:

Yea, and if you think public owned companies are not a picnic, try one that gets raped by private equity ownership. SilverLake Partners ain't the Boy Scouts and will turn Dell upside down, shake the $$ out of its pockets, install every efficiency that does or does not make sense and scoop a big chunk of change at the end when they spin Dell out/sell/discard it as half the organization they once were.

Been there, done that, lived through it. Shi*t sandies for lunch boys and for many months to come. If you work there, exit, go quickly. Life as you know it is.....OVER!

The Dell ship has sailed and their train has left the station never ever to return!

Peace
Feb 5, 2013, 12:30 PM
So Michael is kind of doing what he suggested Apple do years ago eh ?

ksgant
Feb 5, 2013, 12:31 PM
Maybe they'll be the premier "Microsoft Signature" company. They'll sell their computers directly through their online store and the Microsoft store...all without the crap/bloat-ware loaded on it. Just pure Windows. No trial version of this or that.

Microsoft already does this with certain configurations of computers. Maybe Dell will enhance that. Dunno.

winston1236
Feb 5, 2013, 12:32 PM
Steve Jobs beat Michael Dell from the grave. I am so happy on so many levels, one of them being I hate Michael Dell and his right-wing politics.

How dare he have an opinion differing from your own!

balamw
Feb 5, 2013, 12:33 PM
I think the number of PCs sold is quite independent of what any individual manufacturer does. If Dell stopped selling PCs today, all the others would sell more PCs. Very few people would not buy a PC because Dell stopped selling. If Dell stopped buying Windows licenses, the other manufacturers would buy more licenses.

I think you missed the point. It's about Dell continuing to actively sell PC hardware, but promoting them as Linux boxes and not including an OEM Windows license by default.

e.g. Dell's entire lineup of lower end machines become Chromebooks or Ubuntu boxes.

Right now, Chromebooks are manufactured and promoted by lower tier hardware manufacturers like Acer and Samsung. If HP, Lenovo or Dell jump on the bandwagon it's not good for Microsoft.

EDIT: Uh-oh http://www.forbes.com/sites/rogerkay/2013/02/05/hp-endorsement-makes-google-chromebook-begin-to-look-legit/

B

TMar
Feb 5, 2013, 12:37 PM
I think you missed the point. It's about Dell continuing to actively sell PC hardware, but promoting them as Linux boxes and not including an OEM Windows license by default.

e.g. Dell's entire lineup of lower end machines become Chromebooks or Ubuntu boxes.

Right now, Chromebooks are manufactured promoted by lower tier manufacturers like Acer and Samsung. If HP, Lenovo or Dell jump on the bandwagon it's not good for Microsoft.

EDIT: Uh-oh http://www.forbes.com/sites/rogerkay/2013/02/05/hp-endorsement-makes-google-chromebook-begin-to-look-legit/

B

Yep. That's why MS gave them a loan so they could push linux adaption. So you missed the point. Might want to read the post he replayed to as well and comprehend the conversation they are having.

minifridge1138
Feb 5, 2013, 12:40 PM
Obviously you did not get burned in the dot com crash. Think about it.

Think about the peak and subsequent decline of the likes of Microsoft, Motorola, Nokia, Ericson, RIM amongst others. Have heard the same tribulations about those firms as that I have heard about Apple.

When has a half decent retailer gone broke?

Woolworth's went out of business. That was unimaginable at a time.


Also the dot-com crash happened when the dot-com bubble burst.
The situations are not the same. We are not in a Hardware bubble.
In the dotcom bubble, lots of companies were (supposedly) making a lot of money and projecting to make even more. Therefore "analysts" said they worth a lot of money.
As soon as people realized there wasn't really any money being made, everyone dumped their stock.

If every PC / phone / tablet maker was projecting exceptional growth and (supposedly) going to be making a lot of money, then the situations would be comparable.
But Apple seems to be succeeding where many others are not. This doesn't look like a bubble to me.

balamw
Feb 5, 2013, 12:47 PM
Yep. That's why MS gave them a loan so they could push linux adaption.

:rolleyes:

I implied as was done earlier in the thread that part of the reason MS may have loaned Dell money was so they would NOT push linux on their hardware.

gnasher apparently interpreted this as Dell stopping selling PCs, which is NOT what maflynn or I were talking about.

EDIT: Being very explicit. Stopping this: Dell releases powerful, well-supported Linux Ultrabook (http://arstechnica.com/gadgets/2012/11/dell-releases-powerful-well-supported-linux-ultrabook/) from becoming mainstream is probably worth a few bucks to Microsoft.

And the post he quoted and replied to was mine.

B

deconstruct60
Feb 5, 2013, 01:02 PM
...
I wonder what the terms of the loan are and what's MS' expectation.


I wonder what Microsoft wants with Dell.... Maybe finally get into the computer hardware business and sell 100% Windows computers?

Microsoft primarily wants what Silverlake wants. A return on the investment. This is a reasonable place to put a relatively small subset of Microsoft cash position. [ An infinitely better place than buying Yahoo would have been at that inflated price. ] Microsoft has about $60B to invest and more cash coming in.


The core question should more so be what does Silverlake want. What is their liquidity event expectations. If they are looking to recoup their money "fast" (2-3 years ) then that is likely trouble. If it is a long term strategic move then not.

If Dell is allowed to replow almost all the profits back into either current debt retirement and/or realigning the business to take advantage of growing , rather than shrinking, sectors then this can pay off for all involved in 3-6 years quite well.

If it is the unimaginative "private equity" pump and dump. Then Dell is dead zombie walking. Given Michael Dell has a 15+% interest in the whole thing that isn't the most likely path. It is doubtful he is out to demolish the Company with his name on it.

Microsoft's terms are probably along the line that the others (Sliverlake or Dell co. ) can buy them out at some nominal rate early if Microsoft needs to cash out early. Incrementally they'll get bought out over time.

It is doubtful this is about "making" Dell do more or less Linux stuff. Dell is heavily positioned toward making a dent in the server market. That means Linux (along with Windows) or it means losing. I don't think Microsoft is out to loose $2B.

designgeek
Feb 5, 2013, 01:08 PM
I bet Michael Dell is wishing he never made that comment about Apple doing this all those years ago. :cool:

deconstruct60
Feb 5, 2013, 01:15 PM
I bet Michael Dell is wishing he never made that comment about Apple doing this all those years ago. :cool:

Probably not. At the time the legacy PC business was all he really knew how to do. If Apple tried to turn around basically by being a legacy PC business it was doomed.

He didn't see the other opportunities for either Apple or frankly Dell at that time.

I'm guessing he far more wishes he hadn't tried mimicing, badly at that, some of the things Apple did to recover. Those didn't work. Neither did going "scrooge mc duck" and using all of those crappy capacititors for awhile. For a while the company was on a suck the price and margins out of everything strategy which is one reason why they need to go private now to fit things.

balamw
Feb 5, 2013, 01:26 PM
It is doubtful this is about "making" Dell do more or less Linux stuff. Dell is heavily positioned toward making a dent in the server market. That means Linux (along with Windows) or it means losing. I don't think Microsoft is out to loose $2B.

Dell has had Linux/bare metal offerings for years. It seems to depend on how happy they are with Microsoft how they promote this. The netbook was one example. Originally, they were pushed as linux boxes with an option to install Windows. Later Windows became the default and the Linux option was nowhere to be found.

Same with servers/workstations. Today, you can find Linux offerings via their configuration wizards, but the "Dell Recommends" config is still usually Windows. At one point when I was buying a workstation from them I specifically had to call in and get a special part number assigned to it as it was going to be a Linux number cruncher. Couldn't be done on the web wizard even though there was a mention of Linux at the top level description of the box.

That's the kind of stuff I'm talking about. Relative levels of promotion, not abandoning Linux altogether.

B

SockRolid
Feb 5, 2013, 01:38 PM
"What would I do? I'd shut [Apple] down and give the money back to the shareholders," Michael Dell said before a crowd of several thousand IT executives.

Times change.

----------

Dell has had Linux/bare metal offerings for years. [...]

And Microsoft got paid for every single PC Dell shipped, whether or not Windows of any kind was installed on it.

http://www.theinquirer.net/inquirer/news/1686831/dell-breaking-away-microsoft

http://www.pbs.org/cringely/pulpit/1999/pulpit_19990218_000601.html

http://www.linfo.org/microsoft_tax.html

applesith
Feb 5, 2013, 01:42 PM
There is no such thing as the post-PC era. Anyone who believes that doesn't understand computers. It's not that people don't want or need computers but rather the fact that computing power has increased to the point where upgrade cycles are extremely long now. That is the reason for the sales slump the market has been in.

Gone are the days where upgrades provide dramatic performance improvements. The PC boom was happening when the internet was the driving force for those upgrades. An 5-8 year old computer is enough for what the vast majority of people do with one today.

These incremental upgrades are going to catch up to the phone and tablet market too in a few years and people are not going to need them as often. A few years after that the second hand market will be flooded with completely capable cheap devices and those markets will slump as well.

Who thinks post-pc actually means PCs are done with? I thought it was implied how consumers and businesses are moving towards purchasing other devices more frequently. Clearly people aren't throwing out their PCs or not replacing them. I think you take the "post-pc" phrase too literally.

blahblah100
Feb 5, 2013, 02:04 PM
Apple should sue Dell for copying them by going to Uncle Bill for money when times are tough...

Hopefully Apple has legal claim that maneuver. :rolleyes:

mrsir2009
Feb 5, 2013, 02:14 PM
More control, I guess - Dont have to answer to shareholders anymore :)

deconstruct60
Feb 5, 2013, 02:56 PM
Dell has had Linux/bare metal offerings for years. ...

Correct... so why would Microsoft's money make any difference? Michael Dell is putting more personal money into this deal than Microsoft's share. Microsoft is not going to be "running the show" by any stretch of the imagination.



That's the kind of stuff I'm talking about. Relative levels of promotion, not abandoning Linux altogether.

I can see Dell abandoning Linux submarkets that don't solidly show a high potential for growth. There seems to be several things that Dell did "just because" they wanted to be "everything to everybody". That is probably going to change. If desktop Linux looks like a stagnant market I can see the "new" Dell dumping it like a hot potato.

Dell has too many products that don't make a difference in the line up. There primary benefit of going private is to clean house without 300 back-seat-drivers second guessing the strategy. If after going private Dell continues to do exactly what they are doing now, it is likely a failure.

If Windows growth is high then Dell will shift toward it. If not they won't. Microsoft money doesn't change that one way or the other.

iMikeT
Feb 5, 2013, 02:59 PM
I really don't want to see people lose their Dell jobs, especially in this market. However, it is great to see Michael Dell eating crow in this case!

kitsunestudios
Feb 5, 2013, 03:43 PM
For those asking about Microsoft's role, I'm guessing it has to do with the Windows ecosystem. Microsoft probably needs a reliable partner to create touch/pc hybrid devices that show off Windows 8, considering just how heavily invested they are with the "Don't call it Metro" interface across the tablet, phone and PC lines.

AustinIllini
Feb 5, 2013, 04:17 PM
I really don't want to see people lose their Dell jobs, especially in this market. However, it is great to see Michael Dell eating crow in this case!

Dude is still a millionaire, but take your laughs where you must.

roadbloc
Feb 5, 2013, 04:18 PM
I bet Michael Dell is wishing he never made that comment about Apple doing this all those years ago. :cool:

I bet he isn't. He never meant it in the literal sense, although, that is what everyone took it as at the time.

Dell said that he initially refused to answer the original question in 1997, and after being asked to answer twice he basically responded What would I do? Id shut it down and give the money back to the shareholders, because he couldnt imagine himself being CEO of any other company.

Dell went on, The meaning of my answer was that Im the CEO of Dell, I dont think about being the CEO of any other company, Im not a CEO for hire, so if you asked me what Id do for any other company, its not really something I think about.

http://techcrunch.com/2011/10/18/michael-dell-on-the-infamous-apple-shut-it-down-quote-my-answer-was-largely-misconstrued/

Peace
Feb 5, 2013, 04:23 PM
It's too bad Jobs isn't still around to mass email this info to all employees.

This is worth a moment of reflection today.

"I'd shut the company down and give the money back to the shareholders."

15 years later, Dell finally acted on his own advice.

Yeah, I remember when he said that about Apple. Hehehehe. Payback's a bitch.

Steve Jobs beat Michael Dell from the grave. I am so happy on so many levels, one of them being I hate Michael Dell and his right-wing politics.

I bet he isn't. He never meant it in the literal sense, although, that is what everyone took it as at the time.



http://techcrunch.com/2011/10/18/michael-dell-on-the-infamous-apple-shut-it-down-quote-my-answer-was-largely-misconstrued/

So.. People do remember. hehe

I too wonder what Microsoft is getting in this deal.

Perhaps a manufacturing partnership for tablets ?

blahblah100
Feb 5, 2013, 04:26 PM
Dude is still a millionaire, but take your laughs where you must.

Actually, he's a billionaire with a net worth* that exceeds/exceeded that of Steve Jobs.

*Having money only means something when it's in Apple's favor...

thebeans
Feb 5, 2013, 04:33 PM
I had a beige Dell something or other... it was a Pentium II. That lasted forever. Was the last Dell I've ever
used that lived past a year old.

I also have a Dell monitor at home. No problems with it.
I had one of those old beige Dells too. I ended up trading it for a Compaq something or other and then an iMac. My brother had the same ok Dell as me and it is still going at about 13 years old. He finally got a new computer last year but not because the old Dell died. Those old ones were well made.

luffytubby
Feb 5, 2013, 04:45 PM
I too find it strange that Microsoft would lend such a vast amount to a PC vendor.


It reminds me of when Microsoft helped Apple in the late 90s. People are often quick to forget that, but MS did Apple a favor by striking a deal with Jobs about making Office and Internet Explorer(which at the time, was very relevant) for OS9 I believe. That was 97.




Say what you want but Bill Gates is an amazing man. Balmer might be riding the company down the toilet, and maybe Microsoft was never known for their good will or "cool", but I think they did alright, even if they are losing now. Maybe Google and Apple will loose a soon as well?

alfistas
Feb 5, 2013, 06:01 PM
Agreed. Look at what these "expert" analysts did to Apple's last quarter. Their best EVER quarter by some margin, but because they didn't meet the results these "experts" predicted, they suffered massively negative reporting, and a massive drop in sp/market cap.

It's almost as if these analysts buy shares, over-up the predictions and dump just before announcements.

Yep! That's how the system works! unfortunately... :(

WilliamLondon
Feb 5, 2013, 09:01 PM
Hopefully this will allow them to become more innovative and increase competition.

In what way? Competition with whom?

Dell's original innovation was all about supply chain, I'm not sure we can expect a lot from this company, or any others just like it, other than to build more of the same things year after year (with only minor tweaks over last year's myriad models).

Swift
Feb 5, 2013, 09:19 PM
He tried to get ahold of Steve to apologize for that crummy comment back in the late '90s, that Apple should just be closed and sold for parts.

See what happens when you do the Microsoft/Android business model? Razor-thin margins, and being wed to the same archetypes as when you entered the business. Pretty indistinguishable commodity brands.

DaveN
Feb 5, 2013, 09:22 PM
If Apple were to go private today it would be a $550B LBO. Since most shares are not owned by insiders, which is different from Dell, it would be more difficult to go private at all. However it would be possible for Apple and Braeburn to get considerable leverage, both bank and brokerage, buy back its stock in the open market and through dark pools, and make slow progress toward setting up a future go private effort.

If they were to buy back half the company at stock prices of $450-500 at $275B and assuming 4:1 leverage, the cash cost would be only $55B. Pocket change for Apple and Braeburn.

Although today's market cap is only $418B. Only 3x cash in bank.

Rocketman

There is always a premium when doing such a buyout so a $450-500 buyback price is low. But say they pay at 15% premium over $450 that would be $517 hmmm not to far from your range. That would get Apple out from the Wall Street treadmill. Maybe that isn't such a bad idea at the current price + premium. Anyone have a few hundred billion dollars they can lend to me?

Solomani
Feb 5, 2013, 09:23 PM
I bet Michael Dell is wishing he never made that comment about Apple doing this all those years ago. :cool:

Karma is such a biyatch.

Bantz
Feb 6, 2013, 01:34 AM
The Inspiron 15z Ultrabook + Touch, which is the model the closest to the MacBook Pro 15" in terms of hardware, costs about $1400...

I dont see your point?

Mackan
Feb 6, 2013, 02:12 AM
Taking the public money to fund the rapid growth phases and then buying it all back once the situation has leveled out. We may start seeing this as more of a trend.

Really a good move for them and MS. Being public in the market today is a lot harder than it once was.

But hard to buy back if the stock price is at Apple's level, for example. Otherwise I bet Apple would enjoy going private. They don't need anyone anymore. But yet they started to give dividends instead, not knowing what better to do with their money?

Robert.Walter
Feb 6, 2013, 04:19 AM
"Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company's transformation strategy to become an integrated and diversified global IT solutions provider."

How is that to happen due to LBO? Same team leading means same vision and culture. This same management team and ultimate leader failed to innovate and react. What is the reason to think they will Think Better now that there are fewer shareholders involved?

I see this as a way for Dell to stay in power by staving off a shareholder revolt (and Real Change) before one occurs. If I were his competition, I wouldn't fear this move.

a0me
Feb 6, 2013, 05:24 AM
I dont see your point?
You weren't implying that Dell was selling a laptop equivalent to a 15-inch MacBook Pro for only 400?
Because it sounded like you were, and that's just isn't true.

Thunderbird
Feb 6, 2013, 08:05 AM
I hear Ashton Kutcher is going to be starring in a movie biopic of Michael Dell.

Bantz
Feb 6, 2013, 09:06 AM
You weren't implying that Dell was selling a laptop equivalent to a 15-inch MacBook Pro for only 400?
Because it sounded like you were, and that's just isn't true.

Yea I got a better speced machine for much less :)
It came with
Processor : Intel Core i7-3612 (up to 3.1 GHz)
Hard Drive : 750GB Serial ATA (7200RPM) 1 SR
Optical Drive : 8x DVD+/-RW Optical Drive 1 SR
Power Cord : UK 1M 1 SR
451-11870 Battery : Primary 6-cell 48W/HR LI-ION 1 SR
490-13285 Graphics : 2GB AMD Radeon HD 7730M
All for 450 :)

The 15inch quad core i7 macbook pro is about 3 times that! oh no

inkswamp
Feb 6, 2013, 10:32 AM
I'm not going to repeat Michael Dell's famous shareholder's quote about Apple as many others have already done so, but I will point out that no matter how wealthy or powerful or on-top-of-the-world you are, there's just no room for that degree of hubris. Nothing lasts forever, and eventually, time and karma will b***h-slap even the greatest amongst us.

Imagine having a time machine though and going back to about 1998 and telling everyone that in a little over 12 years, Dell and Apple would have more or less swapped positions in the tech world. You would have been laughed out of the room. Amazing how rapidly and unpredictably things change in the tech world.

a0me
Feb 6, 2013, 10:34 AM
Yea I got a better speced machine for much less :)
It came with
Processor : Intel Core i7-3612 (up to 3.1 GHz)
Hard Drive : 750GB Serial ATA (7200RPM) 1 SR
Optical Drive : 8x DVD+/-RW Optical Drive 1 SR
Power Cord : UK 1M 1 SR
451-11870 Battery : Primary 6-cell 48W/HR LI-ION 1 SR
490-13285 Graphics : 2GB AMD Radeon HD 7730M
All for 450 :)

Link?
All similarly specced Dell are in the $1200-1400 range.

JAT
Feb 6, 2013, 12:32 PM
There is no such thing as the post-PC era. Anyone who believes that doesn't understand computers. It's not that people don't want or need computers but rather the fact that computing power has increased to the point where [a tablet is more than enough for them]. That is the reason for the sales slump the market has been in.

Um, did you miss the iPad and other tablets being sold in the last couple years? I edited your comment.
I bet Michael Dell is wishing he never made that comment about Apple doing this all those years ago. :cool:
It was just trash talk. Nothing to care about. Should have passed by like a puff of air, but people keep bringing it up. Just like all sorts of Jobs comments. It's like none of you have ever heard trash talk on a sports field/court/course...wait, that's probably true...nvm.

And this isn't that similar a situation. Michael has been talking about going private for years, IIRC. Can't find proof right now, every search result is less than 36 hours old due to this story.

Verbatim Cookie
Feb 6, 2013, 12:33 PM
[...] I hate Michael Dell and his right-wing politics.

How dare he have an opinion differing from your own!

For one thing, political differences involve beliefs that are strongly held, unlike differences of opinion in other matters. For another thing, I remember reading during the election cycle for the presidential race in 2000 that Michael Dell was a huge contributor to George W. Bush and the Republican Party. I don't want to contribute to the income of such an individual by patronizing his business. (I also don't want to give Intel my business if I can help it see my signature.)

danpass
Feb 6, 2013, 01:02 PM
A Dell P75 was my first PC. I got the big HD storage option too, 540MB :D

Mr. McMac
Feb 6, 2013, 01:14 PM
I'd hate to see Dell shut down. They still make excellent inexpensive monitors with a much better warranty policy than Apple

melendezest
Feb 6, 2013, 01:19 PM
There is no such thing as the post-PC era. Anyone who believes that doesn't understand computers. It's not that people don't want or need computers but rather the fact that computing power has increased to the point where upgrade cycles are extremely long now. That is the reason for the sales slump the market has been in.

Gone are the days where upgrades provide dramatic performance improvements. The PC boom was happening when the internet was the driving force for those upgrades. An 5-8 year old computer is enough for what the vast majority of people do with one today.

These incremental upgrades are going to catch up to the phone and tablet market too in a few years and people are not going to need them as often. A few years after that the second hand market will be flooded with completely capable cheap devices and those markets will slump as well.

I flatly disagree. I believe the reason for the slump is that most people don't use traditional computers beyond the basic functionality that a tablet can provide. In other words, people are using tablets and smartphones more.

I think you are mistaken in saying that people that refer to the Post-PC era don't understand computers. I think that it is you who don't understand consumers. Apple, Google, and their tablets (and smartphones) do, and are laughing all the way to the bank. Sales figures of tablets vs PCs seem to reflect this.

olegandbuster25
Feb 6, 2013, 03:09 PM
had a badass dell
2000 dollar computer my dad bought for me back in 2004
about a year and a half later, the harddrive "blew up"
or thats what the altex guy said.
but i couldnt retrieve any of my stuff.

so no more dell for me.
...
or anything other than apple computers at this point hah.;):apple:

Deadeyeshark
Feb 6, 2013, 03:48 PM
Taking the company private again will invigorate Dell, not having to bow to the whim of Wall Street and shareholders will allow for innovation.

Dell were renowned for making quality PC's many years ago, hopefully they can get back to that.

Mackilroy
Feb 6, 2013, 04:09 PM
I rather like my Dell monitors, though nearly every Dell laptop I've come across has been plagued with problems. Hopefully Dell can turn around and extend the quality of their monitors to the rest of their business.

BC2009
Feb 7, 2013, 11:14 AM
Obviously you did not get burned in the dot com crash. Think about it.

Think about the peak and subsequent decline of the likes of Microsoft, Motorola, Nokia, Ericson, RIM amongst others. Have heard the same tribulations about those firms as that I have heard about Apple.

When has a half decent retailer gone broke?

Yes, I fully remember the dot-com crash and I got burned as the business I worked for lost all of its customers for which we built websites. I had enough sense not to jump on "bubble" stocks. Amazon is a bubble stock if you ever saw one. They are reminiscent of the no-profit big-future-promise stocks of the dot-com boom. Apple's stock is all about fundamentals: cash, revenue, profit, growth.

You talk as if you know something about the stock market because you can cite the fact that everything peaks and declines (incidentally some peak again). But your vague references to the "same tribulations" that you have heard about other companies and Apple do not change the fundamentals. Companies don't survive on rumors and media spin -- they survive on revenue and profit and cash assets to strategically invest.

Amazon has revenue, but no profit, and hardly any cash assets to strategically invest (because their wholesale and operations costs nearly match their revenue). Amazon has got to be the worst investment on the planet and it will blow up just like the dot-com stocks you referenced.

rjohnstone
Feb 7, 2013, 03:15 PM
I'd hate to see Dell shut down. They still make excellent inexpensive monitors with a much better warranty policy than Apple
They're going private, not shutting down. :rolleyes:

Nightarchaon
Feb 8, 2013, 10:03 AM
Interestingly , the company i work for (well know, large company, globally into payrolls) has started replacing its exclusively installed dell desktops and laptops , which we have had for many many years, with HPs now, wonder if the powers that be have had some sort of idea where dell is going, or not going, to be in a year or so ?

Wonder if they are going to focus on premium products and try and take Apple on Apples turf ?

Macs4newbies
Feb 8, 2013, 10:31 AM
What goes around sometimes comes back to bite you. Isn't that so Mr. dell?
JB
macs4newbies.com

TheBSDGuy
Feb 27, 2013, 04:37 AM
I've had the benefit and misfortune of working for several "start ups." Here's what I've observed:


If the startup is a partnership where the partners know and understand what they're getting into, it usually works out at least reasonably well.
If it's being done by Wall Street venture capitalists that look at nothing but bottom line figures, it's almost always a disaster - if not in the short term then certainly in the long run.


The trouble with the latter is that they are bean counters. They look at the bottom line, not with a long term vision, and wonder "How much of a bonus can I get myself if we do this, this, and this," even though the effects they have may be devastating to the long term future of a company. I've seen the bean counters talked into taking other people's money (investors) and literally blowing it on imbecilic products that no one in their right mind would financially back. Why? Because they don't know what they're doing, but they know that in one way or another, even if investors lose their shirts, they'll make a buck on it...maybe lots of them.

Wall Street investors have likely been telling the people at Dell not to develop for the future, but rather to react to the immediate need for them to make a profit. Ship employees jobs overseas and lay as many Americans off as possible - sure it's devastating to the work force, sure it kills the motivation of the Americans to work there, sure those with talent will see the writing on the wall and leave, but there's a buck, a fast buck to be made, and that's all that matters. So what if the products go down the tubes and the company ends up in the dumpster - this process can be repeated time and time and time again with other firms. The bean counters just keep finding other moving targets.

Scott McNealy, former owner of Sun Microsystems relented that he had ever used Wall Street to finance his company numerous times. Instead of allowing him to innovate, Wall Street demanded instant return in spite of the fact that it was killing the company. Innovation costs money, but if those controlling the purse strings are obsessed with their own immediate need to obtain more and more and more shiny objects at the expense of other peoples livelihoods and investors money, so be it.

I'm not a fan of Dell, but I can understand how they got into the predicament they're in. Unlike Sun Microsystems, at least they now stand a chance to be a real company that produces real and innovative products and they've partnered with a company that can likely help them innovate, rather than reacting to the demands of investment firms whose only intention is to rape the company for what they can get out of it.

MonkeySee....
Feb 27, 2013, 04:39 AM
Hopefully this will allow them to become more innovative and increase competition.

Who Dell??

Chuckle chuckle chuckle

gennydesuza
Feb 28, 2013, 01:01 AM
hi

Dell is one of the leading company for creating a innovative and creative creations like in computer world and other technologies Dell is a vibrant, exciting company run by Michael Dell who maintains his focus on customers.Dell is really doing for its customers. For the past few years, this seems to be a real challenge for them.:)