Print 26 comment(s) - last by TakinYourPoint.. on Jan 16 at 3:14 AM

Dell is in buyout talks with two private-equity firms

In an attempt to one day resurface as a true competitor in the computer technology industry, Dell is looking to go private.

An anonymous source recently told Bloomberg that Dell is in buyout talks with two private-equity firms. The talks are in their earliest stages, so it's unclear if the buyout will go through.

Dell is likely looking to go private because it lost one-third of its value last year alone. PC sales are slow since PC demand can't keep up with that of mobile devices, and Dell has to hear about its financial failures from shareholders each quarter.

Dell's market value was $18.9 billion as of January 11. Its enterprise value is 4.4 times earnings before taxes, depreciation, amortization and interest for the last year, making it a lower valuation than every PC maker bigger than $1 billion with the exception of Hewlett-Packard.

Like some other PC makers, Dell was hoping that Windows 8's release would help boost sales of its hardware. However, Windows 8 device sales haven't been that impressive. While Microsoft happily announced 60 million Windows 8 licenses sold just last week, that doesn't mean Windows 8 devices are flying off the shelves. Dell is still waiting on a sales boost for devices like the Dell XPS 12 convertible tablet.

For the third quarter in 2012, Dell's profit fell 47 percent to 39 cents per share while revenue dropped 11 percent to $13.7 billion from a year previous (Wall Street expected $13.9 billion). Its net income fell from $893 million (49 cents per share) in Q3 2011 to $475 million (27 cents per share) in Q3 2012.

For the same quarter, Dell's PC shipments fell 8.3 percent from a year earlier.

Dell predicts fourth quarter revenue of $14 billion to $14.4 billion, which is a bit less than the $14.5 billion analysts were shooting for. In Q4 2011, revenue was $16 billion.

One good aspect is that Dell's shares increased 13 percent today after news of the possible buyout had spread.

Source: Bloomberg

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Dell makes ugly stuff
By tayb on 1/14/2013 9:47:11 PM , Rating: 3
Simple as that. The Dell XPS 13 doesn't look half bad but Dell has such horrible brand image that people aren't buying anyway. Performance has reached a plateau of sorts. Make your devices look nice or watch them sit on the shelves.

Also, where is the Dell Android or Windows phone? Smartphones are highly profitable but I couldn't buy a Dell phone even if I wanted to.

Inept management. And the employees will be the ones who eventually pay the price.

RE: Dell makes ugly stuff
By GoodBytes on 1/14/2013 10:11:29 PM , Rating: 2
I agree, however:

@Dell XPS 13:
-> Screen is awful
-> Screen uses Windows 8 minimum supported resolution while a few years ago, we had much higher resolutions at that size of laptop.
-> Keyboard is awful
-> not replaceable battery (HP does an ultra book in their business line system with a replaceable battery).
-> Not Windows 8 ready, despite being a brand new laptop. Clearly this was on their shelves for years, and now decided to release it.

RE: Dell makes ugly stuff
By menting on 1/15/2013 9:58:38 AM , Rating: 2
I'm one of the rare that has a Dell phone (Dell Streak 5), and the hardware is fantastic, but the software support was crap. The biggest problem was that rarely anyone knew it even existed.

RE: Dell makes ugly stuff
By TakinYourPoints on 1/16/2013 3:14:39 AM , Rating: 2
Using good components would certainly help. Instead they're shipping laptops with trash displays, garbage keyboards, and awful trackpads. Apple and Lenovo are the only companies these days shipping anything with decent user-facing components, and even then you have to pay Apple-level prices on the Lenovo hardware to match up. The other big exception is the Asus Zenbook Prime, and again, you're paying for that quality.

The problem with Dell and so many other OEMs is that even when you pay up, they still fall short with those things.

The only place where quality consistently comes through are their high end desktop monitors, but they had better at a grand+ a pop.

"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser

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