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Dell Said to Be in Buyout Talks With Private-Equity Firms

64 points by chrisaycock 14y ago

TimGebhardt 14y ago
Funny coming from the guy who said he'd shut down Apple and return all the money to shareholders: http://news.cnet.com/2100-1001-203937.html http://news.cnet.com/2100-1001-203937.html How's that Apple company doing anyway? :)
- deleted 14y ago
  [deleted]
- gfodor 14y ago
  Not too good today, actually!
  - bdcravens 14y ago
    Depends on what that means. If you base it on their high of ~700, yeah, their current price ~500 looks pretty bad. However, they started out 2012 ~400. 20% gain in a year is pretty rock solid.
  - sp332 14y ago
    Market cap today is is still $472,000,000,000. Cash reserves around $124,000,000,000. Earnings of $8,200,000,000 on $36,000,000,000 in revenue last quarter alone. I think they're doing fine! :)
  - roc 14y ago
    Apple has an incredibly long and prominent history of having its stock manipulated by traders around the timing of new product events and quarterly earnings statements. When "today" is near one of those events, you probably don't want to anchor your evaluations of the company to a short-window snapshot of stock performance.
    - gfodor 14y ago
      It was more than a little tongue in cheek since AAPL is getting roiled in the press today and yesterday over probably nothing.
twog 14y ago
Exactly what Dell needs. The leadership & vision of private equity firms.
- antr 14y ago
  Worked when IBM spun-off its typewriter and dot matrix printer business and the PE turned it into Lexmark; or the recent Leica turnaround (which is going pretty well given the current economic climate).
ChuckMcM 14y ago
I find the fall of Dell a pretty fascinating story. In part because Dell killed Compaq and a bunch of other PC 'clone' companies with a build-to-order / operational efficiency model. Apple, a company that Dell never saw as a rival, was 'doomed' with its bespoke computer design according to the best and brightest at Dell. But what really put a crimp in Dell has been their dependence on Microsoft and Intel. Being constrained in responding to changes in the world (like the rise of non-Windows OS-X) by what Microsoft did, and early constraints by Intel that prevented them from capturing some server market with AMD chips, when Dell hit tapped out their ability to wring more value out of the supply chain, they lost their growth engine. And then they looked at adjacent markets, but with a clock ticking. Trying to go too far afield into storage, briefly pumping up the music with 'boutique' computers, then committing a cardinal sin of using their customers against themselves by creating a 'lock in' strategy with Dell custom parts (motherboards, power supplies, and chassis). So what keeps a company, when winds shift, from being nimble enough to shift with them? I wish sometimes I could go listen to the discussion that happened during the Opteron event, the Vista event, the first signs of OSX in the enterprise, the Canonical/Linux discussion. That story probably won't come out, and its too bad, I would love to read it.
- djloche 14y ago
  Apple was doomed as a computer company. They survived only when their visionary founder came back to turn the company into a consumer electronics company. Without the successes of the iPod and iPhone product lines, they'd be dead in the water right now.
  - crusso 14y ago
    I would agree that they wouldn't have had the level of success they now enjoy if they had remained only a computer company - but way before the iPod was introduced in late 2001, don't forget that Jobs had already turned the product line around with the hugely successful candy colored iMac, the transition to OSX, and a return to quality and vision within the traditional computer market. With Jobs at the helm, I think that Apple would have been going places selling rice cookers. To write Apple off as "doomed" in that market seems naive.
hodder 14y ago
Dirt cheap earnings yield, high return on cap, decent balance sheet, revenue chugging along at a decent clip, and cheap on a FCF basis. http://www.gurufocus.com/financials.php?symbol=dell http://www.gurufocus.com/financials.php?symbol=dell Smart financial move by Dell. He will rake in cash on Dell as a private buiness, and he will have the increased autonomy he needs to run it. I guess he's not a multibillionaire for nothing.
zandorg 14y ago
Michael Dell himself has already diversified his assets away from Dell stock - he's pretty rich.
rootedbox 14y ago
Dude you're getting a Dell!
RexRollman 14y ago
I really think Dell could learn something from Jobs's return to Apple, because their product line is like a labyrinth.
RexRollman 14y ago
I really think Dell could learn something from Jobs's return to Apple, because their product line is like a labyrinth.
junto 14y ago
Home PC sales were a strong part of Dell's income. Smartphones and tablets (specifically the iPad) have killed the home PC market across the board. Dell still has a strong server market and a strong B2B PC market (strong loyalty) through Dell Premier, but the home PC market is irreversible dead. I used to work for Dell and was part of their dev team when e-commerce was the next big thing and sky-rocketed late 90's. I have always recommended Dell PCs to friends and family. I write this on a Dell Precision T5500, which was a beast (and still is) when I bought it 3 years ago. The build quality on their top of the range products is excellent. However, if my parents came to me today with a recommendation for a new PC, I'd tell them to buy an iPad. They read (and rarely answer) their email, play the odd game of Mahjong, and use Skype to keep in contact with their children and grandchildren. They truly have no need for a PC anymore. I can't count the number of times I have had to RDP into their virus ridden, broken Windows installation, because they clicked on something they shouldn't have and installed spyware or viruses. We shouldn't forget that the "tablet market" used to be a joke. People what chortle loudly about "stupid tablet devices" and how nobody would ever buy one. Every tablet that came on the market was an abject failure. Then Apple came along with the iPad. Everyone thought it was bound to be another tablet dud. Everyone was wrong and Dell and Microsoft got caught with their pants down - one fellating the other. Dell still haven't really got off their knees to recover, but at least they can close their mouth now. The iPad is a genius piece of kit. You really would struggle to break it. Even my parents couldn't get PC style spyware on it if they tried. It is that problem that Dell needs to crack. Microsoft have exactly the same issue and both companies know it. Children these days have no need of a PC either, because they have smartphones. They keep in contact using Facebook chat or Whatsapp. When asked about email the other day, a teenager we know replied "oh, our generation don't use email. That's for oldies and besides you have to wait too long". All of this is available to them via their phones - every second of the day. They are always online and always in contact with their friends. Having a PC means a fixed and non-movable connection to the internet, and they have to share it with their parents and siblings. This includes monitoring by parents, which with smartphones, is harder to do for most non-tech savvy parents. Dell cut 75% of their product line and focus on a product that is better than the iPad. Microsoft bought Nokia for their mobile "experience". They should also consider Dell for their hardware experience. Their build-to-order process and technology is second to none, let's not forget that.

64 points by chrisaycock 14y ago

Funny coming from the guy who said he'd shut down Apple and return all the money to shareholders: http://news.cnet.com/2100-1001-203937.html http://news.cnet.com/2100-1001-203937.html How's that Apple company doing anyway? :)

deleted 14y ago
[deleted]
gfodor 14y ago
Not too good today, actually!
- bdcravens 14y ago
  Depends on what that means. If you base it on their high of ~700, yeah, their current price ~500 looks pretty bad. However, they started out 2012 ~400. 20% gain in a year is pretty rock solid.
- sp332 14y ago
  Market cap today is is still $472,000,000,000. Cash reserves around $124,000,000,000. Earnings of $8,200,000,000 on $36,000,000,000 in revenue last quarter alone. I think they're doing fine! :)
- roc 14y ago
  Apple has an incredibly long and prominent history of having its stock manipulated by traders around the timing of new product events and quarterly earnings statements. When "today" is near one of those events, you probably don't want to anchor your evaluations of the company to a short-window snapshot of stock performance.
  - gfodor 14y ago
    It was more than a little tongue in cheek since AAPL is getting roiled in the press today and yesterday over probably nothing.

twog 14y ago

Exactly what Dell needs. The leadership & vision of private equity firms.

antr 14y ago
Worked when IBM spun-off its typewriter and dot matrix printer business and the PE turned it into Lexmark; or the recent Leica turnaround (which is going pretty well given the current economic climate).

ChuckMcM 14y ago

I find the fall of Dell a pretty fascinating story. In part because Dell killed Compaq and a bunch of other PC 'clone' companies with a build-to-order / operational efficiency model. Apple, a company that Dell never saw as a rival, was 'doomed' with its bespoke computer design according to the best and brightest at Dell. But what really put a crimp in Dell has been their dependence on Microsoft and Intel. Being constrained in responding to changes in the world (like the rise of non-Windows OS-X) by what Microsoft did, and early constraints by Intel that prevented them from capturing some server market with AMD chips, when Dell hit tapped out their ability to wring more value out of the supply chain, they lost their growth engine. And then they looked at adjacent markets, but with a clock ticking. Trying to go too far afield into storage, briefly pumping up the music with 'boutique' computers, then committing a cardinal sin of using their customers against themselves by creating a 'lock in' strategy with Dell custom parts (motherboards, power supplies, and chassis). So what keeps a company, when winds shift, from being nimble enough to shift with them? I wish sometimes I could go listen to the discussion that happened during the Opteron event, the Vista event, the first signs of OSX in the enterprise, the Canonical/Linux discussion. That story probably won't come out, and its too bad, I would love to read it.

djloche 14y ago
Apple was doomed as a computer company. They survived only when their visionary founder came back to turn the company into a consumer electronics company. Without the successes of the iPod and iPhone product lines, they'd be dead in the water right now.
- crusso 14y ago
  I would agree that they wouldn't have had the level of success they now enjoy if they had remained only a computer company - but way before the iPod was introduced in late 2001, don't forget that Jobs had already turned the product line around with the hugely successful candy colored iMac, the transition to OSX, and a return to quality and vision within the traditional computer market. With Jobs at the helm, I think that Apple would have been going places selling rice cookers. To write Apple off as "doomed" in that market seems naive.

hodder 14y ago

Dirt cheap earnings yield, high return on cap, decent balance sheet, revenue chugging along at a decent clip, and cheap on a FCF basis. http://www.gurufocus.com/financials.php?symbol=dell http://www.gurufocus.com/financials.php?symbol=dell Smart financial move by Dell. He will rake in cash on Dell as a private buiness, and he will have the increased autonomy he needs to run it. I guess he's not a multibillionaire for nothing.

zandorg 14y ago

Michael Dell himself has already diversified his assets away from Dell stock - he's pretty rich.

rootedbox 14y ago

Dude you're getting a Dell!

RexRollman 14y ago

I really think Dell could learn something from Jobs's return to Apple, because their product line is like a labyrinth.

RexRollman 14y ago

I really think Dell could learn something from Jobs's return to Apple, because their product line is like a labyrinth.

junto 14y ago

Home PC sales were a strong part of Dell's income. Smartphones and tablets (specifically the iPad) have killed the home PC market across the board. Dell still has a strong server market and a strong B2B PC market (strong loyalty) through Dell Premier, but the home PC market is irreversible dead. I used to work for Dell and was part of their dev team when e-commerce was the next big thing and sky-rocketed late 90's. I have always recommended Dell PCs to friends and family. I write this on a Dell Precision T5500, which was a beast (and still is) when I bought it 3 years ago. The build quality on their top of the range products is excellent. However, if my parents came to me today with a recommendation for a new PC, I'd tell them to buy an iPad. They read (and rarely answer) their email, play the odd game of Mahjong, and use Skype to keep in contact with their children and grandchildren. They truly have no need for a PC anymore. I can't count the number of times I have had to RDP into their virus ridden, broken Windows installation, because they clicked on something they shouldn't have and installed spyware or viruses. We shouldn't forget that the "tablet market" used to be a joke. People what chortle loudly about "stupid tablet devices" and how nobody would ever buy one. Every tablet that came on the market was an abject failure. Then Apple came along with the iPad. Everyone thought it was bound to be another tablet dud. Everyone was wrong and Dell and Microsoft got caught with their pants down - one fellating the other. Dell still haven't really got off their knees to recover, but at least they can close their mouth now. The iPad is a genius piece of kit. You really would struggle to break it. Even my parents couldn't get PC style spyware on it if they tried. It is that problem that Dell needs to crack. Microsoft have exactly the same issue and both companies know it. Children these days have no need of a PC either, because they have smartphones. They keep in contact using Facebook chat or Whatsapp. When asked about email the other day, a teenager we know replied "oh, our generation don't use email. That's for oldies and besides you have to wait too long". All of this is available to them via their phones - every second of the day. They are always online and always in contact with their friends. Having a PC means a fixed and non-movable connection to the internet, and they have to share it with their parents and siblings. This includes monitoring by parents, which with smartphones, is harder to do for most non-tech savvy parents. Dell cut 75% of their product line and focus on a product that is better than the iPad. Microsoft bought Nokia for their mobile "experience". They should also consider Dell for their hardware experience. Their build-to-order process and technology is second to none, let's not forget that.