Dell

Dell has been doing worse than its rivals for many years. They are strong enough to continue competing, but do not compete in smart phones or tablets, which is where the market is really interested in right now. In the past few years, Dell has spent billions of dollars to buy up services, buy additional services, and buy new services. They have also bought software and hardware companies. These are all in alignment with Dell’s overall strategy. They are working to position themselves as a one-stop technology and services shop for small and medium sized firms. This will create an advantage for Dell since their competitors, namely Hewlett-Packard, IBM, Oracle and Accenture, are not interested in the smaller companies. This strategy provided advantage when Dell announced its post revenue of $62.1 billion and net income of $3.5 billion (Bloomberg).

With Apple coming out with new products every few months, it is difficult for Dell to keep up with the innovation spree. Investors lack confidence in Dell to come up with a new idea that is fast selling and low cost. As a result of this, Dell has seen a decrease in share price over the past few years. When Michael Dell returned as CEO in 2007, shares fell even more, highlighting the pessimism the market has about Dell’s potential new ideas. With lack of confidence in the company and no new ideas up his sleeve, Michael Dell understood it was time to go private.

In August 2012, Michael Dell announced to his Board of Directors that he was thinking about going private. In February 2013, Dell announced a deal where Michael Dell and Silver Lake, a global technology investment firm, will acquire them. Dell stockholders will receive $13.65 per share in cash. This represents a premium of 25 percent over the closing price of $10.88 per share on January 11, 2013. January 11 was the last trading day before the rumors of Dell going private through an acquisition started forming. This price is also a 35 percent premium over Dell’s...