This Day On The Street
Continue to site
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

Dell's Stock Lifts on Take-Private Buzz

NEW YORK ( TheStreet) - Dell (DELL) shares jumped 4% late Thursday on word that CEO Michael Dell reportedly considered taking the wheezing PC maker private.

The news circulated through the trading desks based on a Reuters headline Thursday, but some analysts were skeptical that company founder Dell could find the sort of financing needed to buy out shareholders.
Michael Dell, Chairman and Founder of Dell

One analyst offered a back-of-the-envelope estimate that assumed a $20 per share buyout price. With that bid, the total price tag would be between $35 billion and $40 billion, a hefty amount considering that Dell is not exactly a cash-generating machine that typically appeals to private equity shops.

Dell has had a difficult three years as its once enviable low-cost direct-sale model failed to stand up to even lower cost competitors and a strong retail notebook strategy by Hewlett-Packard (HPQ - Get Report).

Dell rejoined the company to revive the business and had only mixed results with a bigger retail push amid a withering technology spending slowdown.

It's not clear if Dell made the going-private statement on reflection of the more turbulent times two years ago, or whether it was an assessment of the business today.

The rumors of Michael Dell taking his company private come at a crucial time for the computer maker, which is desperate to break into new markets.

Dell, which went public in 1988, struggled with weak PC sales during the recession, and is playing catch up to Apple (AAPL) in smartphones.

The company's services business is also up against stiff competition from IBM (IBM - Get Report) and H-P. Lingering economic uncertainty is another factor weighing heavily on Dell.

Dell's profit jumped during its recent third-quarter results, but gross margins narrowed enough for investors to sell off the company's stock.

Dell shares closed up 64 cents, or 5%, at $13.76 Thursday.

--Written by Scott Moritz and James Rogers in New York.

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
Only $9.95
14-Days Free
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DELL $0.00 0.00%
CSCO $25.11 0.00%
IBM $121.04 0.00%
HPQ $9.42 0.00%
AAPL $93.99 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs