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According to Michael Dell's op-ed in the WSJ [1], two main benefits of going private are 1. longterm-planning => value + innovation and 2. activist shareholder

According to Michael Dell's op-ed in the WSJ [1], two main benefits of going private are 1. longterm-planning => value + innovation and 2. activist shareholder avoidance. Michael Dell also has a track record for anti-competitive practices. Hell, the accountant and CFO from the days of their "cookie-jar accounting" schemes are still at Dell.[2] My understanding's that the anti-competitive measures weren't even illegal, it's just that Dell, as a public company, broke the law by failing to disclose the payments from Intel in Dell's financials. Going private removes this burden. [1] http://www.wsj.com/articles/michael-dell-going-private-is-paying-off-for-dell-1416872851 http://www.wsj.com/articles/michael-dell-going-private-is-pa... [2] https://www.sec.gov/news/press/2010/2010-131.htm https://www.sec.gov/news/press/2010/2010-131.htm

yuhong 11y ago
I think the quarterly earnings game is probably what causes this to happen in the first place.
- caminante 11y ago
  I don't think reporting frequency matters as much as the incentives. As long as the company's required to disclose public financials, company's will ALWAYS be tempted to manipulate earnings at the end of the fiscal year[1]. As to incentives for manipulation, Dell's infractions arguably flowed from flaws in stock option compensation and loose accounting standards.[2] Dell execs were pretty risk tolerant...leveraging up with long calls financed by short puts. [1] http://www.businessinsider.com/pay-practices-that-encourage-executive-dishonesty-2012-9 http://www.businessinsider.com/pay-practices-that-encourage-... [2] http://www.nytimes.com/2013/01/18/business/how-dell-became-entangled-in-options.html http://www.nytimes.com/2013/01/18/business/how-dell-became-e...
  - yuhong 11y ago
    I am talking about the issue of taking the payments from Intel not to use AMD in the first place.
    - caminante 11y ago
      You lost me.
      - yuhong 11y ago
        From https://www.sec.gov/news/press/2010/2010-131.htm https://www.sec.gov/news/press/2010/2010-131.htm : "Without the Intel payments, Dell would have missed the EPS consensus in every quarter during this period."
        caminante 11y ago
        Oh! Yeah...Intel had been using anti-AMD "discounts" for quite some time, dating back to 1991. Things ratcheted up in the late 90's. Giving dishonest information feeds inaccurate estimates.

yuhong 11y ago

I think the quarterly earnings game is probably what causes this to happen in the first place.

caminante 11y ago
I don't think reporting frequency matters as much as the incentives. As long as the company's required to disclose public financials, company's will ALWAYS be tempted to manipulate earnings at the end of the fiscal year[1]. As to incentives for manipulation, Dell's infractions arguably flowed from flaws in stock option compensation and loose accounting standards.[2] Dell execs were pretty risk tolerant...leveraging up with long calls financed by short puts. [1] http://www.businessinsider.com/pay-practices-that-encourage-executive-dishonesty-2012-9 http://www.businessinsider.com/pay-practices-that-encourage-... [2] http://www.nytimes.com/2013/01/18/business/how-dell-became-entangled-in-options.html http://www.nytimes.com/2013/01/18/business/how-dell-became-e...
- yuhong 11y ago
  I am talking about the issue of taking the payments from Intel not to use AMD in the first place.
  - caminante 11y ago
    You lost me.
    - yuhong 11y ago
      From https://www.sec.gov/news/press/2010/2010-131.htm https://www.sec.gov/news/press/2010/2010-131.htm : "Without the Intel payments, Dell would have missed the EPS consensus in every quarter during this period."
      - caminante 11y ago
        Oh! Yeah...Intel had been using anti-AMD "discounts" for quite some time, dating back to 1991. Things ratcheted up in the late 90's. Giving dishonest information feeds inaccurate estimates.