Both Michael Dell on the one side and Carl Icahn on the other side "try to buy" DELL. Mr. Dell wants to make DELL a private company, so he wants delist it from the stock exchange. His "opponent", Mr. Icahn, want's to keep it as is. Logic tells me that neither of these two plans can work, it''s so obvious. Then I wonder what all this buzz is? Surely there must be a scam going on here, crafted _together_ by Mr. Dell and Mr. Icahn. It is IMO inevitable that DELL will go bankrupt, and I think it is these two "rivals'" plan to profit big _together_ from DELLs downturn. Don't you think? Any other plausible theories? Just one of the recent news articles re DELL: http://www.reuters.com/article/2013/06/21/icahn-dell-loans-idUSL2N0EX1QC20130621
I have no clue what Icahn or Dell are thinking. But if you got it figured out then hop on and enjoy the ride and keep us updated.
Neither are dumb. And both have really good advisors. They are buying the company for like 6x cashflow. On top of that for Michael Dell, he will have the runway and patience to do things to get the company back on the right track. It's possible that 6 years from now when he IPO's the company he'll have made 100% return through dividends and 200% return if the company gets into the right market. He's playing the Warren Buffet game. Everyone else is looking at the next quarter or the next year's forecast; he's thinking 5 years from now.
or it could be smart market game - good news / bad news - stock up / stock down - somebody looses and somebody makes good money... Check the strong bullish volume surge on Dell in period from January 12 2013 until February 14, 2013. Then try to find out what cause such strong volume and who was buying/selling during that time. the check strong bearish volume surge on April 19-23, 2013. Again, try to understand the cause and see who was selling/buying. personally, I do not want to be in long on this stock.
Letters were sent out to shareholders by a "Special Committee of the Board of Directors of Dell" urging shareholders to vote for the Michael / Silver Lake merger. There will be a special meeting held on July 18, 2013. In the meantime, shareholders are voting either for Michael Dell or Carl Icahn. Do you want the old struggling Dell or do you want Icahn to clean house. Icahn could sell it off in pieces or change management. I'm pretty sure HP is watching carefully. If you are a shareholder, make sure you vote.
The DELL Jan 13 buywrite looks interesting here. +85 cents (same as buying stock) if Michael gets the vote. If everything goes bust, cost basis is 12.15. Stock was 11 before takeout and trades at comparable valuation to HPQ right now. Personally, I think this will happen. Investors don't really have anywhere else to go. This isn't like YAHOO where management controlled the process and had personal agendas that were contrary to the shareholders.' But it could be a bumpy road. (ie vote fails and deal happens two months from now).
Personally, Dell is already really wealthy...i don't think he is interested in netting 100% or 200%. He started that company with his barehands and I believe he truly wants to see it back to its prosperous days again...it was his baby. Buffett never built a company from the ground up like Dell did...they're different in mentality.
Mr. Dell has put another offer on the table: $13.75 if the committee changes the voting rules such that only a majority of those voting at the special meeting or by proxy need to vote yes for the buyout (the current rule, and to be honest I thought this was the case for every buyout everywhere, is that a majority of outstanding shares need to vote yes).