5 ms·
> All these machinations and adjustments are precisely what Michael Dell sought to escape when he took his business private two years ago. Got me thinking, wha
by mojuba 11y ago
> All these machinations and adjustments are precisely what Michael Dell sought to escape when he took his business private two years ago.
Got me thinking, what keeps companies like Apple and Google from doing the same? What are the benefits of staying public for them? What would be the consequence of going private? I'm just very curious now.
- deleted 11y ago[deleted]
- deleted 11y ago[deleted]
- coob 11y agoApple are buying back stock at quite a rate.
- iraphael 11y agoHow feasible/quick is it to completely buy your own company off again? I ask because the idea is funny in my head: Something that is valued at price x and has the capital (aka x moneys and then some) to pay for itself.
- dcwca 11y agoI think the implication with these huge companies is that erosion of shareholder trust is the same as the erosion of consumer trust.
- deleted 11y ago[deleted]
- pcurve 11y agoIf they remain as successful as they are now, going private will never be an option because doing so would cause complete erosion of trust by shareholders, customers, public, and world. They will become opaque entities, and it will become very difficult for them to operate globally. Putting that problem aside, at their current valuation, a group of investors will need to raise a huge amount of capital for relatively small return. Dell took it private because the market effectively wrote off Dell and it wasn't trading much more above the book value. So raising capital to cover the amount was not difficult because the company was still reasonably profitable with good cash flow.
- throwaway2048 11y agosurely "erosion of trust by shareholders" isn't an issue for a wholely owned private company.
- rhino369 11y agoYou can't just go private. You have to buy out shareholders, all of them. It is essentially a buy out. That means you have to sell at a price that the shareholders accept. Which means paying more than the marketshare. For Apple and Google, you'd need a massive amount of money to buy the companies. Dell found it by taking his money plus taking billions in private equity partners and can creditors. One thing that helped Dell was that it was a pretty cheap company. Trading at less than 10 P to E. Plus Wall Street trusts Apple and Google. There isn't a huge gain by going private.