While many technology companies; LinkedIn, Facebook, Zygna and more; Michael Dell, Founder and CEO of Dell Computer Corporation, is taking his company in the opposite direction. After 24 years of being a publicly traded company Mr. Dell is planning to buy back the company that he started almost 29 years ago when he was still in college. Along with Silver Lake Partners and a $2 billion loan from Redmond-based Microsoft, Mr, Dell will pay $24.4 billion ($13.65 a share) to purchase the company from its stockholders.
“This feels like the ultimate insider trade. Why weren’t the plans and projections that Michael Dell has going forward been shared with me and other shareholders?” said Frederick “Shad” Rowe, general partner of Greenbrier Partners and a trustee of the $22 billion Texas Employees Retirement System. Rowe said he dumped about 400,000 shares of Dell on Tuesday, adding, “I was so irritated I didn’t want to think about it anymore.
In recent years the company has been struggling due to the decline in PC sales and the rise of mobile devices. By taking the company private Michael Dell fells that he can turn the company around and bring it back to being the powerhouse it was in its heyday. Mr. Dell didn’t specify what he can do differently as a private entity to bring the company back. It could be that without all the input from all the other shareholders he fells that he will have more freedom to implement the changes that will be needed to take the company to a more service oriented business.
In a press release Michael Dell had this to say about the impending buyout: “I believe this transaction will open an exciting new chapter for Dell, our customers and team members. We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise. Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision. I am committed to this journey and I have put a substantial amount of my own capital at risk together with Silver Lake, a world-class investor with an outstanding reputation. We are committed to delivering an unmatched customer experience and excited to pursue the path ahead.”
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