Sep 19, 2013

What’s the benefit of Dell going private?

Dell shareholders overwhelmingly voted in favor of taking Dell private. What’s the advantage of doing this? Won’t it make it harder for the company to raise capital by issuing additional stock?

I don't think it will matter much at all. The PC business is in decline, and Dell missed the mobile boat. Going private isn't going to help prosper in a rapidly shrinking PC market.

For one, it frees up the company from worrying about people like Carl Ichan trying to take over the company. Aside from that, it also allows the company to take a longer term view, and plan accordingly. As a publically traded company, they are essentially on a 3 month cycle where they face punishment in the stock market  if they don’t meet earnings expectations, never mind if there is a good reason for it.  This move could gain the company much need flexability.

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