Re-tooling for the post PC era
Dell or Die
Shareholders for and against the proposal by Michael Dell, Silver Lake Partners and other investors to buy Dell for $24.4 billion are squaring off this week as the date for a planned meeting when shareholders will cast their votes gets closer. Facing an uncertain outcome, there are even rumors that Dell will postpone the meeting to give Michael Dell and his partners more time to garner the necessary votes.
For those of us in the industry, this vote is about much more than whether Dell's existing shareholders will be fairly compensated for the value of the company. It's also crucial to whether Dell goes forward as a viable company with the opportunity to engage in a business transformation that creates long-term value for customers, partners and shareholders -- or is forced by circumstances to try and squeeze the last bit of life out of it PC business.
Given that, according to Gartner, the PC market just experienced its fifth consecutive quarter of decline, this is not a pretty alternative.
What's notable is that even after a go-shop period that began after Michael Dell's proposal was announced, not a single operating company stepped up to consider buying Dell. In other words, no one with the intention of tackling the business transformation challenge the company faces, with the goal of creating lasting value for customers and shareholders, was willing to do it.
Which means that being acquired by Michael Dell and partners and taken private --where it can take the tough, but necessary, actions that could help accelerate its transition into new higher value and higher margin businesses -- may be Dell's last best chance at an opportunity to re-tool for the post-PC era.
We believe that whenever the vote takes place, a majority of shareholders will vote for it -- and they should.
To read Marty Wolf's perspective on why, read his article published yesterday in Yahoo! Finance.
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