Dell's Buyout

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Dell’s Buyout
Dell has always been one of the largest PC makers in the United States. Recently, though its share of the PC industry has been declining. It went from the number one low cost provider of PCs in the world to number 3. Its inability to adapt to the new markets that have emerged has caused the company to fall behind other hi-tech companies such as IBM, Apple, and even HP. I feel this is an important topic because it is an example of a large company that has lost touch with what consumers want and is currently trying to restructure itself in order to gain back the dominance they once had. Consequently, Michael Dell has announced his decision to attempt a leverage buyout in order to retain control of his company. Furthermore,
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Furthermore, he praises Michael Dell as the perfect man to take Dell Incorporated out of its slump. He stated that “he (Dell) is the man to do it. No one cares enough about the future of the company. He put in 700 million of his own money and spearheaded the deal” (BBC News). This is different from the view point of the New York Times which doesn’t necessarily take a side with the shareholders or Michael Dell, but rather analyzes the effect this move might have on the hi-tech market and the probability of Dell Inc. seeing growth in the long run and continuing to compete with larger hi-tech companies. According to the BBC article, analysts are stressing the fact that a leveraged buyout will give Mr. Dell the flexibility in turning the company around, by no longer needing to show strong results every quarter to shareholders on the stock market. Moreover BBC points out that the company lost its direction between 2004-2007, the same years when Michael Dell stepped down from day to day management of the company. This includes the unsuccessful launch of the Streak tablet back in 2010 (BBC News)
However, Aaron Ricadela from Bloomberg News presents another side of the buyout in his article titled “Dell Pressed to Sweeten LBO bid amid T.Rowe Opposition”. It brings to light the opinion of the opposition, the shareholders, whom have

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