Discussion in 'Article Discussion' started by Gareth Halfacree, 5 Aug 2013.
Pops an extra $500M in the pot.
That is a lot of moneys! What are the perceived benefits by becoming a private company? I actually cant stand dell hardware, from the rack all the way to the desktop I think it feels quite cheap! The rack mounts are flimsy and my work laptop is poor build quality.
The biggest thing is a reduction of risk. The stockmarket is a volatile thing: get some bad publicity - such as Dell has had recently, slipping down the market share ranks and watching its profits shrink thanks to declining consumer interest in traditional PCs - and your share price sinks, then the rest of your stockholders panic, then it sinks further, then before you know it you're filing for Chapter 11 bankruptcy protection just to keep the wolves at bay. If you're privately owned, you've still got investors to answer to - but a much smaller group, and they are usually in it for the long-haul. The acquisition contract will also usually include agreements that the investment group can't change its mind and cash out within a certain period of time, and can even include credit lines with investment companies - Dell might be able to get its hands on a large volume of Microsoft software licences without paying any cash up-front, for example, once Microsoft is a part-owner of the company.
There are disadvantages, of course: an investment group will hold considerable power over the company, and could potentially force Dell (the person) to do things he wouldn't otherwise do. It also makes it harder to raise additional funds: instead of just slicing another chunk off the company and floating more public stock, you need to renegotiate with your investment group.
Yes I had assumed it was basically to try and avoid the affects of public panic type thing, when share price does fall a bit. Wonder how it will go.
You open with 24.9million not billion (end of first paragraph)
Whoops - sorry about that. Fixed now!
And who owns Dell? Oh, another one from the tribe! Shalom..
Here's what an insider person from the tribe has to say about their role in our history, our catastrophes rather, since the early years of the 20th century:
Keep this sorry crap in your own topic. This is an article about Dell, not your own personal agenda.
Separate names with a comma.