Get PJ Media on your Apple

VodkaPundit

Hewlett-Packard-Zombie

February 5th, 2013 - 12:34 pm

HP is preparing to dine on the flesh of a still-living victim:

In the wake of Dell’s $24.4 billion buyout announced Tuesday morning, HP put out a statement taunting its rival by noting that the company “faces an extended period of uncertainty and transition that will not be good for its customers” while also vowing to capitalize on Dell’s misery by swooping in to snag its old customers.

“We believe Dell’s customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity,” HP wrote.

That’s to be expected, of course. But if I were Michael Dell, I’d be more worried about Greeks bearing gifts:

Once the sale to a group of investors that includes investment firm Silver Lake is finalized, Dell’s stock will stop trading on the Nasdaq nearly 25 years after the Round Rock, Texas, company raised $30 million in an initial public offering of stock. Microsoft Corp. is investing in the deal with a $2 billion loan.[Emphasis added, natch]

Of course, MS also once investing $150 million in a dying, nearly forgotten company called Apple Computer, and that turned out pretty nicely for all concerned. MS even made a tidy profit off the deal. But that was during the Bill Gates years, and Steve Ballmer’s advances shouldn’t always be so welcome.

The question remains what Dell can accomplish as a privately-held corporation that it can’t do with a bunch of noisy shareholders. Brad Chacos explains:

All-in-all, the company’s newly private status likely won’t change much for everyday users in the short term. Dell will continue making computers and restructuring the company to focus more heavily on the enterprise market, just as it has been doing for the past several years. That reality may not be “sexy,” but it is a huge deal for Dell and the Windows ecosystem alike—and the substantial investments of Silver Lake, Microsoft, and Michael Dell himself guarantee that future will occur, Wall Street whims be damned.

Short version: Dell gets some breathing room, away from the demands and expectations of Wall Street, which is clearly drunk. (Gays have better gaydar; I have better drunkdar.) But what Dell doesn’t get is breathing room from the marketplace. They’ll also get a heaping load of new debt.

If Michael Dell manages to turn this thing around, it will become the stuff of legend.

Click here to view the 9 legacy comments

Comments are closed.