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Dell (DELL) issues a letter to shareholders recommending a yes vote on the Michael Dell-Silver...

Dell (DELL) issues a letter to shareholders recommending a yes vote on the Michael Dell-Silver Lake offer to acquire the company for $13.65 per share.
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Comments (6)
  • sgarg05
    , contributor
    Comments (12) | Send Message
     
    i think this is best for business as no one better than Michael Dell run this company in current situation - http://bit.ly/14awFDH
    31 May 2013, 06:58 AM Reply Like
  • Harold3H
    , contributor
    Comments (2) | Send Message
     
    But is it best for stockholders? I don't think so.
    31 May 2013, 08:50 AM Reply Like
  • NWInvestments
    , contributor
    Comments (23) | Send Message
     
    Wow! What a bold and optimistic viewpoint on Michael Dell. A self sacrificing man he is not! Neither does he have what is best for Dell in his mind. Michael Dell is thinking of one person, (okay maybe a few more) which is himself and his crony management team. Let's review.

     

    1.) Michael Dell issues guidance of 5.8 billion in profits 6 months before he asks to take the company private.

     

    2.) Knowing full well, the company has not exceeded 3 billion in profits at any point in the last 5 years.

     

    3.) Think about it, a 100% increase in profits? For a company that size?

     

    4.) Then when he comes back and revises his profit estimates down to 3.7 billion. The stock tanks. Then he comes back and revises profits down to 3.0 billion and it tanks again. Ask yourself this question? Are things actually as bad as he is indicating? Or were his 100% increases in profits (not revenues, profits) the problem? Is the business the problem? Or is Michael Dell the problem?

     

    5.) Then so long as he maintains access to the public capital markets, he continues his acquisition spree, slashes profit margins on existing sales to gain share, and reserves 92 million as bonus program for him and his executives who have been crashing this company for years.

     

    6.) At the same time, while he would have you believe that the company is on death's doorstep. What has he done with his pay? Well let's see, the financials show that in 2010 his pay came out to 963,000 dollars. In 2011 he gave himself a raise and received 4.3 million. In 2012 he did it again and raised himself to 16.1 million dollars.

     

    Here's a hypothetical question. Let's suppose that you are one of the lower end workers at Dell. You sign up for a position where your quota is 100,000 dollars in sales per month when you know you've never been able to do anything near that in the last 4 PC sales jobs you've had. You come back and tell your manager you need to adjust your guidance down to a 75,000 dollar quota, and yet again from there to a 50,000 dollar quota because you won't be able to make your sales. Do you believe that Michael Dell would call down to your supervisor and raise your pay by 4x? Or would you be fired? Because that is certainly the leeway he has given himself, and the rest of his upper management team.

     

    Here is a man who has spent 10s of billions of dollars of the public's money to do acquisitions where he has been lucky to retain .25 of value for every 1.00 he has spent. I actually think it is a little more sinister than that, I think those entities will produce revenues eventually, he just doesn't want them to do so much just yet. Those horses are still in the stable.

     

    Dell is a powerful brand, and there was a time when Michael Dell's interest was aligned with his shareholders. Now he is simply trying to create a terrific illusion so that he can steal every bit of value that is left in this business for himself. The earnings power of this company is still there folks. He is trying to hide it.

     

    Carl Icahn will bring in new management, unlock tremendous shareholder value, and get someone in there who is focused on making the company succeed instead of spending all his time trying to bilk the public and then go private, unlock the value behind a curtain, and the re-sell this company back to the public again in a future IPO. Anyone who is dumb enough to fall for this, should go ahead and sell, and vote for him, and possibly re-purchase the stock in the next IPO as well. But if you wake up and wonder where your money is one day, you can bank on the fact that it has moved from your account, to the man's pocket who you were trusting (Michael Dell) and he did it too you while you were trusting him to do what is "best" for "the company".

     

    If Carl Icahn gets his way, you'd better buckle up. It's going to be an interesting ride, and he is certainly getting mine and my partners votes.

     

    Michael Dell has no right to destroy Dell shareholder confidence and values just because his name is on the place. He needs to be stopped, and he needs to be fired, and so does his entire management team.

     

    You've already heard that Dell is shifting it's revenues away from PCs and yes they are on a downward trend, but even Meg Whitman at HP, says that the death of the PC has been greatly over exaggerated. I agree. They will slump, but they are not going to zero. Business customers have to have PCs to get their work done. Tablets will not cut it for higher powered end-users. HP does not even have positive earnings and their stock has powered ahead 50+ percent this year. Dell is not even losing money, and he would have you think the world is coming to an end. He is capitalizing on the PC downtrend to steal the whole entire company for himself.

     

    He does not have your best interest at heart, only his own.
    31 May 2013, 09:13 AM Reply Like
  • Banarasi69
    , contributor
    Comments (5) | Send Message
     
    if the company went down to its current state under Michael Dell's leadership, why should he be the one to run it and bring it back up?
    31 May 2013, 11:12 AM Reply Like
  • bigd3086
    , contributor
    Comments (146) | Send Message
     
    i agree with nwinvestments this has all been a shell game to hide the potential of this company so that a few people can benefit from it at a later date i also believe carl icahns deal is a better way to protect shareholders and then give them an opportunity to participate in any value thats is unlocked later
    31 May 2013, 11:38 AM Reply Like
  • bluecat38
    , contributor
    Comments (10) | Send Message
     
    NWInvestments,
    I agree with your analysis that the value in Dell is not being accurately portrayed by Michael Dell. I think that there is life in th PC market when one considers business needs worldwide. I agree that tablets and smart phones don't cut it for heavy use.
    I am voting against the merger with my shares and think that new leadership is sorely needed at Dell.
    31 May 2013, 11:38 AM Reply Like
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