News - Dell goes private in $24.4 billion deal

[HEXUS]

Founder Michael Dell will be back at the helm, in full control.

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[3dcandy]

Huge chunk of cash for a behemoth like Dell which is in need of a vast restructuring. Mr. Dell could be the man to do it though...

[OilSheikh]

How does this change things ?

Can someone explain ? I am bad with finance mumbo-jumbo

[jim]

It was a publicly traded company on the stock market, owned by a huge number of shareholders.

Now Michael Dell, aided with finance from several banks, a private equity firm and Microsoft, has purchased the company and taken it off the stock market, so together they own 100% of the firm - all the shareholders are gone.

Point is that now he can take the company in a totally new direction, whatever he wants (and will no doubt be influenced by MS who have part-funded the purchase and will likely own part of the company). Before they would've been restricted by shareholders' opinions, and a constant need to appease them and make sure the stock price stays level or rises, and dividends keep coming. Also, I would imagine, he thinks he's more capable than the people who were previously running the company.

[the54thvoid]

Quarterly targets can seriously hamper investment and R&D. When all your shareholders want is a return on their investment, it makes it hard to pitch a long term strategy if the intervening years will be low yield.

In private hands he can focus the company toward any goal he chooses without requiring shareholder approval.

[Unique]

i'm not convinced this will work, but would love to be proved wrong. so many companies closing down, going bust, and stopping and reducing this and that. then again if things are poor now, it's a good time to buy if you really think you can do well in future

[Sohaib.27]

This is a big move. There was a time when I thought dell made the worst computer until I bought my first. I'm keen to see what happens with this move made by the company. Maybe this move might get them more profit?

[badass]

Quarterly targets can seriously hamper investment and R&D. When all your shareholders want is a return on their investment, it makes it hard to pitch a long term strategy if the intervening years will be low yield.

In private hands he can focus the company toward any goal he chooses without requiring shareholder approval.

Indeed. HP's share price went to new highs under Mark Hurd when all he did was cut back on R&D, salaries and any other expenditure that won't cause an immediate drop in profit and he was loved for that. Of course he was killing the companies long term future.
Now Dell can theoretically on their own long term future rather than pleasing idiots.