The same thing happened at Dell and every other company before the deal. I've seen this many times - they are gathering weak shares.
Michael Dell, the founder of the computing and technology company that bears his name, confirmed today that he intended to buy it back from shareholders. In a deal announced this morning, Dell and Silver Lake Partners will buy out the company’s existing shareholders in a transaction worth $24.4 billion.
The deal values Dell at $13.65 a share, amounting to a 25.5 percent premium over the closing price of $10.88, where Dell was trading on Jan. 11 before the first reports of renewed interest in a buyout transaction emerged.
The deal also brings together private equity fund Silver Lake with software giant Microsoft, and represents the latest step in a relationship that began when Microsoft bought out Skype for $8.5 billion in 2011.
The deal includes a $2 billion loan from Microsoft.
Microsoft confirmed its participation in the deal in a statement:
Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private. Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.
“We’re in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.”
Other financing is coming from Silver Lake; Michael Dell’s personal investment company, MSD Capital; the rollover of existing debt; and financing contributed by Bank of America/ Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets, plus Dell’s cash on hand.
Attribute some of the private equity interest to a lack of other investment opportunities. But that money may also be particularly suited to investing in the chip business, which has traditionally scared public investors with its boom and bust cycles. Private equity firms can immediately seize control of a company at a depressed price instead of waiting for other investors to lift the stock piecemeal over an extended period of time.
Returns for taking on such a risk can run around 15% annually, even after paying a 20% premium on current stock price, analyst Joe Osha of Merrill Lynch estimated in a research note on Tuesday. He pinpointed ten other takeout candidates based on features attractive to private equity firms: strong cash flows, high cash balances and low dividend yields.
Yes, the same company that took Dell private at a market cap of $25 billion which was 25% over its trading price.
SMH up $.61 or 1.22% after hours.
In a report published Friday, Summit Research analyst Srini Sundararajan maintained a Buy rating on Micron Technology, Inc. with a price target of $34, saying that Senator Chuck Schumer's objection to Chinese government-controlled Tsinghua-Unigroup's offer indicated that the deal was "real and credible."
Senator Chuck Schumer has urged the US CFIUS to block any potential sale of Micron to Tsinghua-Unigroup. This is proof that Tsinghua-Unigroup's bid to acquire Micron "is real and credible and is being discussed at the highest levels in the U.S. government," analyst Srini Sundararajan said.
This is actually very bullish. This money will come right back in on a market pop. You might want to go to a search engine and read this article and others like it: Purchases of foreign stocks and bonds by Japan's giant pension funds and other big investors in 2015 could be their highest for at least a decade, if they keep pace with the $42 billion splurged during the first two months.
At that rate their annual net sales of yen would be over 30 trillion, the most since the government started keeping records a decade ago, and almost as much as the previous five years combined.
That will add to pressure on the yen, which earlier this month struck 122 per dollar - its lowest level since July 2007. ******* My comments: Sovereign Wealth Fund and Sovereign Pension funds from Japan, Korea and China, Russia and some European countries are pouring close to a trillion dollars into the US Market this year. Don't bet against them. That money that left will be back!
Yes, retail shorts. Disparaging idiots is a good idea. They do not belong in the market. People who listen to idiots like Cramer (who bankrupted many in his hedge fund) need to take what is left of their money and go home.
I posted the most important part of article below. Yes, this is exactly what happened and it was GS that slammed the futures for the Chinese Government so they could make a huge buy. The Chinese are dumping treasuries and dollars and are about to make an aggressive move very soon and push the price of gold way up and take over the world's reserve currency status with their Yuan. I posted an article on the GLD board on Aug 8, explaining what is coming. You should read it.
When most market participants aren’t watching, liquidity and volumes are low so it is far easier for a big player to execute buying and selling orders specifically crafted to manipulate prices. And that’s exactly what happened on Sunday night July 19th. In the initial hours of that Sunday-evening trading that had started at 6:00pm EDT, gold was stable at its Friday close like usual. Minutes before 9:30pm, everything changed.
Out of the blue, gargantuan gold-futures sell orders slammed the American gold-futures market. Within just over a single minute, someone dumped nearly 24k gold-futures contracts controlling around $2.7b worth of gold! This selling was so extreme that twice within that single minute 20-second trading halts were triggered. That magnitude of selling in such a short time blasted gold $48 lower to $1086 in one minute.
Even before the data confirmed, it was blindingly obvious that this was an extreme shorting attack on gold. A normal long seller would never sell so many gold-futures contracts so fast, as the devastating price impact would impair its own exit price. And no normal seller would unload so much gold at such an illiquid low-volume time in the markets. When I learned of this that very evening, I knew it was short sellers.
Their timing was exquisite. Not only were American traders relaxing late Sunday evening and not paying any attention whatsoever since gold rarely moves then, Japanese traders were gone for a public holiday. And the Chinese markets were due to open within minutes at 9:30pm EDT, so there’s no doubt these short sellers were hoping to spark a gold panic in China. $1086 was a fear-spiking new 5.3-year low!
But this extreme gold-price manipulation was so blatant that already-scared Chinese investors thanks to their stock bubble bursting didn’t bite. Gold soon rebounded to regain nearly half of those shorting-attack-fueled losses. And this metal actually rallied in the Chinese session on Monday the 20th, with volume on the Shanghai Gold Exchange running 100x July’s normal daily volume to that point!
By the time that old recently-ended 8:20am EDT US gold-futures open arrived that day, gold was already back up to $1115. It had gained back 60% of its extreme one-minute losses during first Chinese and then European trading. Considering the new secular gold lows and horrendous sentiment, this was a great show of strength. But then the Western financial media got involved, fanning the flames of panic.
Early on that Monday, all the major news organizations were soberly reporting that gold suffered heavy selling in China. They claimed Chinese investors were being forced to liquidate their gold holdings to meet stock-market margin calls, and implied that this Chinese selling could persist for a long time. But this was total rubbish, absolutely untrue! I was shocked at how false and deceptive that coverage was.
It wasn’t Chinese selling, the Chinese actually bought gold that day. All that selling took place in a single minute in the American futures markets Sunday night! If something like the resulting flash crash had happened in the US stock markets, traders would have cried foul and immediately known it was an artificial manipulation attempt. But since no one follows gold anymore, they failed to look into the actual events.
Unfortunately Western traders started selling gold on the new secular lows and false threats of more Chinese forced selling. And gold continued slumping from there over the recent weeks, finally drifting back down to its original shorting-attack low just this week. Not only was the gold flash crash an artificial construct, so was the subsequent weakness. And the fact that short sellers were the culprits was soon confirmed.
Every Friday afternoon, the US Commodity Futures Trading Commission releases detailed reports on futures traders’ positions current to the preceding Tuesday. Known as the Commitments of Traders, that week’s proved gold’s flash crash was a concerted extreme one-minute attack by American-market speculators. Their total shorts soared to a radically-unprecedented new all-time record high of 201.6k contracts!