Dell Dashes Momentum

Like a patient with a mysterious illness, Dell(DELL) continues to surprise investors with unexpected and unpleasant changes in its condition.

The latest episode came in a dramatic fashion, as the PC maker delayed its third-quarter earnings release and conference call at the 11th hour and noted that government regulators have stepped up their investigation into its accounting practices.

The news caught Wall Street by surprise and sent Dell's shares down 4.1%, or $1.06, to $24.69 in recent trading Thursday.

The developments create more uncertainty for the Round Rock, Texas, company, which was supposed to deliver third-quarter financial results Thursday without the baggage of a negative preannouncement that has accompanied its previous two quarters' results.

Thrivent Financial's Mike Binger bemoaned the fact that the news comes just as it appeared Dell was starting to get its act together.

"All the feedback from the channel is that their business is improving off the bottom," says Binger, whose firm is long Dell.

Binger says he has no idea how important the Securities and Exchange Commission investigation will prove, given Dell's limited and cryptic statements about the probe to date. At the very least, however, it's a distraction on the PC maker's road to improvement, he says.

In a note to investors, Goldman Sachs analyst Laura Conigliaro offered a much more cynical interpretation of the latest events.