This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Dell's in the Doldrums

The downfall in Dell (DELL - Get Report) shares hit a new low Tuesday -- a 52-week low, that is.

For the world's largest maker of computers to hit that dubious level is bad enough, but perhaps more disconcerting is that the stock's plummet from its 2005 high in late July has been as rapid as it has been brutal.

What a difference a quarter makes; Dell shares rode a bullet train higher along with the Nasdaq from May to July on strong results in the first half of the year and high hopes about the second half.

But its momentum went into reverse in mid-July, a day after Intel (INTC - Get Report), the sole supplier of semiconductors to Dell, sparked a flicker of concern that it wasn't meeting demand requirements of its customers because its factories were at full capacity .

In the subsequent week leading into its own financial report on Aug. 11, Dell shares lost almost 5%.

Then, hurting its own cause, Dell slightly missed Wall Street's second-quarter sales target and offered third-quarter targets below expectations. The company cited errors in pricing its products too low as well as weakness in federal government spending. Since then, shares have dropped another 14% to $33.80.

And far from abating, the selling continues, with shares dropping eight out of this month's 13 sessions.

Often the darling of the tech space for its operational efficiency, Dell has suffered some chinks in its armor this year as it has pushed its business model into markets beyond the computer, such as TVs and digital music players. The law of large numbers is also hurting the Round Rock, Texas-based company, with its growth goals and margin targets coming under increasing scrutiny.

"Wall Street is obviously in the frame of mind that they need to be shown that Dell can do a better job in terms of meeting revenue guidance and expectations," says Bill Gorman, vice president of equity research for PNC Advisors.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SPY $205.27 -0.24%
DELL $0.00 0.00%
INTC $30.08 0.64%
IBM $160.59 0.87%
AAPL $124.24 0.70%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs