In Texas today, Dell (DELL) shareholders should have voted on plans to take the embattled PC maker private. But of course, the vote was delayed (again!) to Aug. 2.
So … other than the crazy DELL shareholders willing to ride this roller coaster, who cares?
Here’s the skinny, in a nutshell:
- Founder and CEO Michael Dell proposed taking the company private at $13.65 over six months ago.
- There have been lots of fireworks since then, including Microsoft (MSFT) partnering up with Silver Lake to get a stake, and Carl Icahn and Southeastern Asset Management recommending an alternative deal for shareholders to oust Michael Dell.
- The final price tag for a Michael Dell-led buyout has just squeaked up to $13.75.
- Dell stock is around $13 or so today — meaning either a deal goes through and shareholders get an instant pop … or it falls through and the stock probably flounders around until Carl Icahn can circle the wagon and make a deal of his own for shareholders to vote on.
That’s about it. Can we move on?
There’s a bit of drama here, sure. Michael Dell and the company’s special committee have delayed the meeting and tried to court shareholders. Parties that have not cast their vote are effectively refusing the deal, since a threshold of investors need to assent and it’s not just a question of getting a simple majority of votes cast.
Thus the headlines — a big power struggle at Dell, between its founder and crusty old activist Carl Icahn! There are big Wall Street firms involved like BlackRock (BLK) and State Street (STT)! It’s a proxy for the post-PC age, and could signal a trend for other embattled tech companies like Advanced Micro Devices (AMD) that can go private and unlock shareholder value!
Look, it’s all noise. The Dell vote is going to resolve one of two ways: The buyout goes through and Dell jumps to $13.75 and sticks, or the deal does not and shares suffer in the short-term. Billionaire Carl Icahn has mused about Dell repurchasing most of the outstanding shares at $14 apiece, but as the Michael Dell drama shows, we are a long way from anything being certain here.
If you’re riding the Dell roller coaster, I guess there’s no reason to punch out now. Whether the deal goes through Aug. 2 or later via an Icahn led buyout, the pop is what you’re eventually looking for, right?
But I’ll just point out that the buyout waiting game in Dell stock does come with an opportunity cost. While Dell has popped 27% year-to-date so far, there are plenty of other stocks out there that have done quite well, too.
The smart investor held Dell before Jan. 11, then sold a month or two later. If you bought after the initial pop … well, you’ve missed out on a nice rally elsewhere on Wall Street.
- Michael Dell boosts bid, buyout vote delayed. (MarketWatch)
- Icahn says founder is “trying to catch a falling knife.” (Business Insider)
- Adam Levine-Weinberg says Dell is the riskiest stock on Wall Street. (The Motley Fool)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.