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Martin Opsahl

Martin Opsahl
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  • Dell (DELL) has warned that its operating profit will come in at $3B in FY 2014, down from a previous internal forecast of up to $5.6B, while its revenue will fall by $10B over four years. The dire outlook came in a 274-page preliminary proxy statement that seeks to persuade investors why Michael Dell's $13.65/share offer, which would take the company private, is better than higher bids from Blackstone (BX) and Carl Icahn, which would keep the firm public. [View news story]
    It sounds to me like Dell is throwing a temper tantrum in his sandbox. Wonder if he will threaten to tell his Mommy next? My interpretation: "It's MY company and I can do what I want to!! I'm going to make EVERYONE pay if they don't want to play by MY rules!!" or..."I'm taking my toys and going home, 'cause y'all aren't playing fair!". How do you counter that tactic? Spank him? Find a 'binky' big enough to satisfy him? This has been fun to watch...
    Apr 1, 2013. 03:36 PM | 2 Likes Like |Link to Comment
  • Three Dell (DELL +0.7%) investors owning a combined 3.3% of the company - Harris Associates, Yacktman Asset Management, and Pzena Investment Managment - have joined Southeastern Asset Management (8.5% stake) in opposing the Dell LBO, Reuters reports. Dell ticked higher to $13.63 today, putting it within a hair's breadth of its $13.65/share LBO price. For now at least, the LBO consortium isn't budging[View news story]
    I am not going to pretend to be the smartest the guy in the room, nor do I understand all the ins and outs of trading stock... but, I did learn about capitalism in High School. I learned that a widget is only worth as much as someone is willing to pay for it. Supply and Demand. Dell stock was trading at $10 - $11 a share before the announcement of the LBO. It shot up roughly 20% almost overnight. So, my question is simple: What is the true value of Dell's stock? Is it the pre-LBO announcement price - or the post-LBO announcement price? My gut tells me it's closer to the former than the latter.
    If you take in to consideration the speculation that Dell is going to announce a significant decrease in Y/Y earnings over last year - why would the stock be valued higher than $13.65? If it is truly worth $24 or $25 a share, why is it not trading there now? Pure speculation? Wishful thinking over a bad investment? Or, maybe it's just pure greed driving individuals to squeeze a successful businessman for every penny they can because it's easier than mimicking Michael's own success. What would the price of the stock be if Michael and Silver Leaf pull their offer off the table entirely, and kept the company public? Would it magically jump to $25/share, and wipe a sweaty brow after narrowly missing a fast moving LBO? Or... would it tumble past it's pre-LBO announcement price, well into the single digits? That may be a tougher question than it seems... at least, as tough as someone is willing to make it. But, if it were my money, I would get out of the way and pick up a well performing stock that doesn't have all the drama attached to it. I like life simple like that though... may not be for everyone.
    Feb 13, 2013. 04:49 AM | Likes Like |Link to Comment
  • More on Dell's LBO: Microsoft (MSFT) will provide a $2B loan rather than an equity investment, as had been reported. Michael Dell will remain chairman/CEO. The deal is expected to close before the end of the July quarter. Dell will have a 45-day "go-shop" period to solicit alternate bids; a $180M termination fee applies. Look for disgruntled shareholders to challenge the deal, particularly given Michael Dell's conflict of interest. But finding a higher bid could be easier said than done. DELL halted. (PR[View news story]
    I'm glad I sold all my stock at $30... never saw the value in reinvesting once it started to tumble. I never guessed that Dell would try to take the company private again though. Makes sense to me... I would do the same if it were my company and I had the leverage and resources to make it happen.
    Feb 5, 2013. 04:06 PM | Likes Like |Link to Comment