Print 26 comment(s) - last by TakinYourPoint.. on Jan 16 at 3:14 AM

Dell is in buyout talks with two private-equity firms










Source: Bloomberg

Comments     Threshold


RE: Hmm
By stromgald30 on 1/14/2013 10:57:04 PM , Rating: 2
Going private isn't exactly giving up. By going private, they answer to a single, longer-term investor. This removes some of the short-term pressure so that they can make the difficult decision to invest in the future and take some short term loses to become more competitive in the long run.

It's like how some companies go bankrupt, but re-structure and come out stronger. On the surface it sounds bad, but in the grand scheme of things, it's better for the company.

I hope this will allow Dell to turn things around. They've had some flashes of good products, but overall they seem stagnant compared to Asus and other newer entrants. HP and Dell are the last of the old guard of U.S. PC makers, and I think Dell is actually making the smarter move (vs. what HP is doing).

RE: Hmm
By MozeeToby on 1/15/2013 9:50:31 AM , Rating: 2
Here's how "going private" works at least 50% of the time with these firms.

1) Firm buys a controlling interest in Dell
2) Firm replaces board members with people they control
3) New board members hire a 'consulting firm' that just so happens to have connections to (or even just plain is) the private equity firm
4) New board takes out loans against company capital to continue paying 'consulting firm' despite no changes being made
5a) In the unlikely event that Dell manages to turn things around, private equity firm gets rich!
5b) In the far more likely event that Dell ends up bankrupt, private equity firm gets rich! (And the banks that offered Dell loans in the first place get the shaft).

