Report: Dell May be Going Private
January 14, 2013 8:34 PM
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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
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.
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.
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1/15/2013 12:34:28 AM
Going public was stupid. The personal service has been gone for decades. The XPS 12 is great, but you left out an SD card reader, WTF & the price is firmly in Apple territory. Jumping into the smartphone market was a waste. I think having three business lines of computers Vostro, OptiPlex, & Precision was a bad move. Just stick with the latter two lines. Ok I have to admit I buy Vostro 470's all of the time. Windows 7 Pro upgraded to 32GB of RAM runs quite well. Throw in a SSD as well. The electronics selection is laughable. The monitors are still fantastic but the price just keeps going up & up. Having a very limited selection of Windows 7 computers is a bad move. I have no love for Vista 8. Putting 5400RPM Hard Drives in laptops is a mistake, it makes them run like slugs which will give the end user a bad rap of your brand.
"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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