4 ms·

As a newly private company – now more firmly under the control of Mr. Dell Can someone explain what, exactly, has been preventing the CEO and founder of the c

by Jabbles 14y ago

As a newly private company – now more firmly under the control of Mr. Dell Can someone explain what, exactly, has been preventing the CEO and founder of the company from doing what he thinks is best. Is it just the threat of being fired (like Steve Jobs)? By the "board"? Will that threat disappear?

bluedevil2k 14y ago
The Board prevents that, as well as American corporate law. The American corporation is a series of checks and balances - the Board checks the CEO. Dell is in a unique position because Michael Dell owns so much of the company, 14%. It would have been difficult, next to impossible, to dismiss him from the Board. However, it would not have been as difficult to dismiss him from the title of CEO. Even private companies have a Board, so the same situation exists today. Likely just new people on the Board, along with Michael Dell.
rrrrtttt 14y ago
So actually Dell is going to have much less control of the company than he has now. Shareholders are patsies and CEOs are the guys who effectively control the board. Now that the company goes private he's going to answer to his lenders, and these guys are tough.
- bluedevil2k 14y ago
  I'd imagine a guy who built a company into the size of Dell, and is personally the 41st richest man in the world, is tough as well.
  - seunosewa 14y ago
    Apparently, he's not tough enough to run a public company? (Playing devil's advocate.)
Swannie 14y ago
He gets to move to a longer term view than the next quarters numbers.
- loumf 14y ago
  This and other items that Wall St. cares about, but aren't necessarily in the best long-term interest of the comapany. For example, they can now have less of a focus on margin. It's the constant quest for margin that had Dell outsource its whole company to Asus: http://www.asymco.com/2012/12/07/the-real-threat-that-samsung-poses-to-apple/ http://www.asymco.com/2012/12/07/the-real-threat-that-samsun...
ChuckMcM 14y ago
In my experience the difference between being a public company and a private company is all about dealing with stockholders; what you have to disclose and how folks react. A company the size of Dell will deal with at least one and usually several shareholder lawsuits a year if their stock is at all volatile, they will have Sarbanes-Oxley rules they will have to audit for, they have to answer in the news when their stock goes down, they have to explain every quarter what they did and didn't get done in the quarter. As a private company they can do a much better job of controlling the impression the publish has of them, they are less distracted by shareholder concerns, and they have a small number of shareholders to answer to and be frank with. For a company that is self sufficient (which is to say doesn't need to go to the public to raise funds for operations or expansion) it is a lot simpler. It has been stated that this is why Fry's Electronics never will go public.

by Jabbles 14y ago

bluedevil2k 14y ago

The Board prevents that, as well as American corporate law. The American corporation is a series of checks and balances - the Board checks the CEO. Dell is in a unique position because Michael Dell owns so much of the company, 14%. It would have been difficult, next to impossible, to dismiss him from the Board. However, it would not have been as difficult to dismiss him from the title of CEO. Even private companies have a Board, so the same situation exists today. Likely just new people on the Board, along with Michael Dell.

rrrrtttt 14y ago

So actually Dell is going to have much less control of the company than he has now. Shareholders are patsies and CEOs are the guys who effectively control the board. Now that the company goes private he's going to answer to his lenders, and these guys are tough.

bluedevil2k 14y ago
I'd imagine a guy who built a company into the size of Dell, and is personally the 41st richest man in the world, is tough as well.
- seunosewa 14y ago
  Apparently, he's not tough enough to run a public company? (Playing devil's advocate.)

Swannie 14y ago

He gets to move to a longer term view than the next quarters numbers.

loumf 14y ago
This and other items that Wall St. cares about, but aren't necessarily in the best long-term interest of the comapany. For example, they can now have less of a focus on margin. It's the constant quest for margin that had Dell outsource its whole company to Asus: http://www.asymco.com/2012/12/07/the-real-threat-that-samsung-poses-to-apple/ http://www.asymco.com/2012/12/07/the-real-threat-that-samsun...

ChuckMcM 14y ago

In my experience the difference between being a public company and a private company is all about dealing with stockholders; what you have to disclose and how folks react. A company the size of Dell will deal with at least one and usually several shareholder lawsuits a year if their stock is at all volatile, they will have Sarbanes-Oxley rules they will have to audit for, they have to answer in the news when their stock goes down, they have to explain every quarter what they did and didn't get done in the quarter. As a private company they can do a much better job of controlling the impression the publish has of them, they are less distracted by shareholder concerns, and they have a small number of shareholders to answer to and be frank with. For a company that is self sufficient (which is to say doesn't need to go to the public to raise funds for operations or expansion) it is a lot simpler. It has been stated that this is why Fry's Electronics never will go public.