Share This Article
In an unexpected and exciting twist for the PC industry, Dell — pending regulatory and stockholder approval — has been sold to Microsoft, Silver Lake, and Michael Dell himself for $24.4 billion. Michael Dell remains the largest shareholder with 16%, and will continue to run the company. Microsoft’s part of the sale totals $2 billion, though big questions remain about how Microsoft will be involved in the newly-private company.
The best question to ask at this point iswhy Dell is going private. The short answer is because the PC is slowly dying, and so is Dell’s stock value. While its stock grew in value until 2005, Dell’s stock has steadily declined ever since. Dell has tried to reverse this slide for years, by shaking things up with acquisitions and a shift of focus to enterprise hardware and services, but seemingly these changes haven’t been enough to right the ship. Here we are: 25 years after debuting on the stock market, Michael Dell is taking his company private again.
What does Dell hope to achieve by going private? In short, it needs some time away from the public limelight to work on some truly innovative products. One of the biggest problems of being a publicly traded company is that you live and die by your quarterly results — but products can take a lot longer than three months to develop. In essence, Dell might want to spend 12 months and billions of dollars developing an awesome new product — but with nothing to show for it in the intervening window, except for more losses, the company’s stock value would take a dive. By going private, Dell can ignore the ire of Wall Street and do whatever it wants. (See: Dell needs a better business strategy, not a buyout.)http://www.extremetech.com/computing/147646-dell-sold-to-microsoft-silver-lake-for-24-billion-what-it-means-for-the-pc
No comments:
Post a Comment