There is no excuse for throwing away money.
You want to gamble, buy TSLA calls or puts, the stock moves quickly on some days.
He makes 80 cents a year BEST CASE. He does get $4 in cash from Dells coffers, so he is only paying $9.65 for the company.
They sell desktops at a loss. Laptops at break even.
The fewer of those clients they keep the less they make on consultation.
Servers are all they have. And that business is tough, HP, IBM, all cutting margins.
Throwing money away is never OK.
Nothing, and I mean NOTHING can make the stock trade OVER $14, unless there is an OFFER of $14 or more.
Icahn's offer is $12ish. MD is 13.65. All others have LEFT the game.
If these numbers today are any indication of how bad it is, expect the stock to fall, not rise.
MD cannot change his offer, only pull it.
If he did, Icahn would lose a pile of money. So would MD so its just not gonna happen.
Fact is this, Michael knew that the numbers were going to show decline after decline, miss and more misses.
There is no guidance, which is a scandal in an of itself, because Icahn and MD have seen the books, they know what is coming next Q. We may see a loss.
Yes, without a tool that returns the start button to the desktop and quarantines the metro disaster, Win 8 is pretty had to swallow.
He forces Dell to go to the bank or issue paper to raise billions of dollars. He then loots ALL the cash and quick sale assets from the company to pay out a 12 dollar dividend.
What is left is a debt laden, barely profitable business in decline.
He then strips off all the remaining assets on the stub, does another special dividend in 6 months, then walks away. Leaving the bond holders and banks to take a 8 billion dollar loss on a bankrupt company.
The shareholders may get an extra 50 cents in a year over the 13.65 offer, but the company and its leadership dissolve by 2015.
There is NO WAY the committee will approve that deal. Nor would anyone lend Dell the money to pull this scam.
Nicely said sir, nicely said.
Want to make a few more bucks, sell some leaps. The Jan 2015 15 calls sell for 35 cents.
Those expire at zero in a few short months.
If he had waited two quarters to make this offer, his offer could have been 10 and it would be accepted.
This is a miss by HALF. 40 cents expected, 20 cents delivered.
If there were no offers on the table for Dell, the stock would be at 7 as a result of this news.
Icahn realizes that all projections in his proposal are instantly invalid.
Including Dell issuing 4B in debt. Who would even lend them the money at less than 6%? Business in decline, eventually Dell will be unprofitable.
This company is not failing because of leadership. Its the market telling the world that the PC phase of technology is in decline. Tablets and large phones rule.
Dell still gets to run its profitable server and consultation business, its very profitable. MD pays 13.65, and makes $1.50 a year for then next 15 in recurring profits.
It still requires borrowing money and saddling the company with so much debt in order to get the $12 for buyout. The remaining company with be worthless, any profitable pieces sold off.
His intention is not to bring Dell private and run it for profit. Its to destroy it to make a few buck.
He only has 7%, SE has less than 15%. Their offer is #$%$. If they had a real offer, why not offer $15 for all the stock?
Because its NOT a real offer. Its a scheme to trick the shareholders and hijack the board so they can demolish the company and make an extra $1.
Because if Icahn gets his deal, Dell will dissolve and go away. Michael Dells legacy will be destroyed.
All Michael Dell need to do is wait until the earnings are released, which will be dismal, and Icahn will fold his hand.
Try $14.25. Dell is in the same decline that Blackberry was. It has many unprofitable business units.
Icahn is a raider, he would destroy the company, walk away with a few extra bucks for share. Nobody trusts him.
The option action on this stock is so heavily weighted towards a close at 70 that there is very little that will move the stock from 70 tomorrow.
Unless news or something bizarre pops up, the options traders are guiding an insane amount of shares.