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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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RE: Hmm
By GoodBytes on 1/14/2013 10:06:52 PM , Rating: 2
No even. 13-14inch laptop with a med range Nvidia or AMD (Radeon) graphic card, IPS panel with a high resolution, high build quality, junk free, ~9h of battery life and it will sell like hot cakes, no mater the price

It's not like this is impossible to do, they used to cram such performance in a 12inch system, and still manages 9h of battery life (Dell XPS 6-7 years ago with the 9-cell battery (of course, without the IPS panel, as that wasn't available in laptop form at the time)).

RE: Hmm
By piroroadkill on 1/15/2013 8:33:12 AM , Rating: 3
Go buy a Sony. They're not even as expensive as you'd think.
Sony E14, 14", 1600x900, Radeon 7670.. blah blah blah..
Just saying, there are options, but yes, they are VERY thin on the ground.

RE: Hmm
By Wolfpup on 1/15/2013 11:07:47 AM , Rating: 2
I kind of feel like HP and Dell have flipped on their mainstream hardware. Like Dell used to offer pretty close to top of the line hardware for reasonable prices, with tons of configuration options. Now their stuff has almost no options, tends to be lower end than HP, etc. while HP is like how Dell used to be.

Only exception are the Alienware systems that are basically like their old high end systems and have lots of options like you'd expect (ugly front grille or not lol).

"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

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