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> Dell announced it would become a public company again through a complex arrangement that involved buying back tracking shares for VMware, the software busines
by asaph 8y ago
> Dell announced it would become a public company again through a complex arrangement that involved buying back tracking shares for VMware, the software business that Dell owns an 80 percent chunk of. ...
> ... Taking over an existing listed stock allowed Dell to avoid the usual IPO process...
Huh? Can someone please explain this to me like I'm a 5 year old?
- spyspy 8y agoIt's not the ELI5 version but Matt Levine has a detailed writeup about it. https://www.bloomberg.com/opinion/articles/2018-07-02/dell-is-going-more-public-again https://www.bloomberg.com/opinion/articles/2018-07-02/dell-i...
- auspex 8y agoBig private company wants to trade shares publically but doesn't want to go through the whole process of an IPO... so the big private company buys a smaller publically traded company. Now big company has "merged" is a publically traded company.
- asaph 8y agoIs this considered a loophole in the system?
- appleiigs 8y agoNo, it’s a well known maneuver. Was popular in the past few years to reduce taxes. From an Washington Post article: “The idea behind the business maneuver, called a corporate inversion, is simple: a U.S. company merges with a foreign one and moves its headquarters abroad, avoiding the high U.S. corporate tax rate of 35 percent on foreign income”.
- tdhoot 8y agoTo be clear, a corporate inversion is generally used to reduce taxes. I believe when you're simply doing it to avoid the IPO process it's just called a backdoor listing.