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Dell Computer Corporation (DELL) Message Board

  • bashfordcapital bashfordcapital Feb 8, 2013 6:25 PM Flag

    Southeastern Asset Management made a mistake

    This management outfit made the mistake of getting too deep in Dell shares, at too high share prices, and now is looking at a loss. That's their problem.
    It's not Mike Dell's job to ensure that Southeasterrn (or any other investor) makes a profit from buying Dell shares. Mike Dell's job is to manage Dell's business operations, which as evidenced by DELL's revenues and profits , he does very well.
    By making public their dissatisfaction with the $13.65 buyout price all Southeastern is doing is drawing attention to themselves as an incompetent money management company. I expect that due to this revelation Southeastern will lose some its current and potential future investor clients. To have a loss is one thing, but to make matters worse by publicizing it is stupid.

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    • Mike Dell will be the biggest loser if it drops back to single digit.
      I think M Dell is in big dilemma now:

      1. Deal is blocked, Silver Lake walks, Price goes down to $9
      M Dell will lose $4.65 / share ($13.65 - $9)
      2. Raise the price to $16 ( $16 - $13.65 = $2.35)
      M Dell has to raise $2.35 of his buyout offer, which he can easily make it back from this year's cash flow.

      He knows the value of this company and Southeastern has calculated the valuation for us to clearly understand they are robbing us. Which one will he choose?

      • 2 Replies to pchung6
      • I am waiting for $9 drop to buy a lot more-----Bashfordcapital. How much dell pays you anyway/post. just few cents.

        HOPE This helps.

      • Mike Dell will walk away from the $13.65 offer.
        I expect the original offer his grioup had planned was about $12.50 per share, which was a nice big premium over the $10-$10.50 where DELL had traded much of last year.However, leaks of a pending buoyout sent the shares up near $13. To make the new higher price work I expect Mike Dell and Silverlake had to add a bank lender or two and that is probably when Microsoft agreed to lend some money as well.
        Regardless of what a few disgruntled stockholders (who originally paid too much for their DELL shares) may want, that does not change the fact that $13.65, $24 billion, is a premium valuation for Dell's current business operations. In all likelihood, if the LBO group walks away now, Wall Street will drop the stock down to trading at about $9 per share. Mike dell and his LBo group can always come back at a later time and take the company private for $12 (or less).

    • I rather lose my investment in this stock than have this greedy guy laugh at us as fools after robbing our money.

    • Mr.Dell is a mistake here !
      Southeastern does a good job steping in to prevent this robbery to happen.

      Sentiment: Hold

    • BF .. you wrote "Mike Dell's job is to manage Dell's business operations, which as evidenced by DELL's revenues and profits , he does very well." ....
      Dell sure is profitable ... did aquisitions ... but at the expence of shareholders by not paying dividends,shareholders patient enough to let Mr.Dell act.
      And now Mr.Dell came up with a great idea to go private .... and have it all.
      Is there really a need to go private ?
      Well thanks to Southeastern and other major holders Mr.Dell will have to try a bit harder !

      Sentiment: Hold

      • 1 Reply to jankoros
      • The only "need' to go private is the likelihood that Wall Street , during a few years of restructurring of Dell's business ,will sell down the price of DELL stock. Depending on how negative the short term business operations results, DELL stock could trade down to $7 or less per share.
        Anybody holding DELL shares should realize the risk to the share price should the current $13.65 offer not receive enough YES votes.
        Mike Dell is in a win-win situation here. If his offer is accepted he can go forward transforming DELL without the brutal scruinity suffered by a public company. If his offer is rejected the stock price will decline and he can take his time buying more shares as Wall Street sells off the DELL stock during the near term uncertainty , which is inherently part of a transforming company..

    • Want to know what truly is STUPID? Read any post from Bashfordcapital, even you can laugh at that fool.