Dell Plans To Go Private

by Paul Joseph on February 4, 2013 · 0 comments

Going public is every business’s dream but in some cases, it could put pressure on the company to perform as per the expectations of the investors. This may lead to improper functioning of the firm, either in terms of deviated mission statement or the pressure to perform well financially. Some companies are forced to an IPO like Facebook that got chewed up by the market after initial valuation and share price plunge, and others like Twitter try to sell their stocks and equity to liquidate the holdings of the high end staff to keep them satisfied and avoid an IPO. Dell, one of the biggest names in notebook and PC manufacturing is undergoing talks with private equity firms for an internal buyout. The catch here is that company’s founder, Michael Dell is reported to take a majority stake in the company and Silver Lake and Microsoft Corporation would become minority investors.  The investment group, which held negotiations with Dell’s camp in New York on Thursday, has secured up to $15 billion of debt financing to take Dell private from four investment banks — Barclays, Bank of America Merrill Lynch, Credit Suisse and RBC Capital. Dell’s has a high market capitalization and it has been struggling to transition from a commodity PC supplier to an enterprise that provides a full fledged IT stack. This dictates that multiple private equity firms would have to invest in the company for a buyout to be possible. The market has short sighted investors and investing bodies. In short, all they care about is the next quarter’s earnings and revenues. Dell is trying to go from a public enterprise to a private enterprise which would give it leverage to focus more on its mission and value proposition in the market it operates in rather than generate necessary profits. It would go from being a supplier of commodity hardware, mainly traditional personal computing, to being a supplier of enterprise-grade IT infrastructure. Dell had been struggling in the PC business of late. Lenovo had been catching up recently and knocked Dell over in a lot of countries as a primary choice for notebook PCs. In India, Acer is the player that gave Dell a run for its own money. Let’s see if the buyout pans as good as Michael Dell expects or is it another story of a company succumbing to equity holders. Image Courtesy |   topnews Looking For A Social Media Agency?? – Contact WATConsult – India’s Leading Social Media Agency

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