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
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Check Out This Stock As Dell Goes Private

Chris Lau, Kapitall: As Dell (DELL) continues to toy with buyout plans from founder Michael Dell and investment firm Silver Lake, the landscape for the PC market at large – something investors should note ahead of any actual privatization of the company.

[Read more from Kapitall: 5 Stocks With Happy Employees After The Fast-Food Strike-Out]

If Dell is taken private, shareholders will get $13.75, a special dividend of $0.13 per share, and a $0.08 dividend per share in the third quarter. With Dell out of the public eye, investors would have access to one less direct link to the fortunes of the PC market.

The overall PC market is shrinking. IT research firm Gartner said that second quarter shipments  dropped by 10.9%.

Screen Shot 2013-08-05 at 10.32.44 AM

PC Makers

If Dell is no longer a publicly company, the firm can either improve the quality and design of its PC products, or reduce its focus to develop smartphones or tablets. Either way, the shift will give competitors like Hewlett Packard (HPQ) or Lenovo (OTC:LNVGY) a temporary boost in market share. While Dell experienced a 3.9% decline in PC shipments in the second quarter of 2013, Lenovo gained 1.7% in market share compared to the same period in the previous year. HP gained 1% in market share, although it too, experienced a 4.8% decline in growth.

Looking to the long term, if Dell makes a concerted effort to improve the quality of its lineup, such as the Dell XPS13 or Alienware products, then HP could face some real competition for its premium PC products. Dell could be free again to try new things. The PC giant had once been free to test Android Phablet computers and thin Latitude laptops that could be charged wirelessly, back in 2009. Dell could once again redefine “ultrabooks” and the paradox in offering a tablet and laptop as a single solution.

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!


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

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