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back to article Michael Dell to buy himself on Monday?

Michael Dell may not cash out and do a leveraged buyout of the company that bears his name, but instead put his own money where his mouth has been and buy majority control the eponymous pride of Round Rock, Texas. And, according to the latest reports, he could finalize the deal to take Dell private as soon as Monday. Saying "To …

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Silver badge

so what is he exactly buying?

If the plan is to get rid of the baggage of an unprofitable PC business and start afresh as IT services/consultancy - like IBM did - what's the value of paying umpteen billion for the DELL name?

Why not just create "DELL services" from scratch, poach all the people who are nay good from Dell, call all Dell's customers and say "I'm the original DELL, I have all the people who were any good, I'm cheaper - switch to me".

(At least in the UK you have a right to use your own name for a business, whatever anyone else is using it for)

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Bronze badge

Re: so what is he exactly buying?

Sounds to me the plan is more along the lines of telling Wall Street to fuck itsself so he can do what he wants without a bunch of people who are clueless about IT influencing his company's direction and decisions. Which in my opinion is a sound enough plan on its own.

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Silver badge

Re: so what is he exactly buying?

Problem 1 is that Dell the company already does managed services, so if Dell the man tried to get into it with a name anything like Dell Managed Services, Dell the company would sue his pants off. In the US you can use your name for business, but if your name is too similar to a competitor's, it's generally "first come, first served." We had that happen in Maine recently with two "Bob's Discount Furniture" businesses.

Problem 2 is that even if he got away with using the name, Dell the PC company would still exist, and people would associate the services with the PCs regardless of any actual association. So his new services company would still be hostage to the image of the PC company.

Problem 3 is whether he could actually poach the good employees, although in today's economy, he could probably just as easily pick up their equivalents off the streets.

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Anonymous Coward

Re: so what is he exactly buying?

Many services/consultancies are suffering in this economic climate. Today’s terms are payment on successful delivery. If the code don’t work you don’t get paid. Long gone are the days when you could market your organization as a workforce of highly skilled software developers and charge for bums on seats. Companies have realized the outsourcing firms hire the cheapest, regardless of weather their employees can even write a medium sized application or not, and charge the rate for specialists.

Its a tough world going forward for services/consultancies because they could spend years paying employees to write code and in the end never get paid by the client because they cant get the code to work.

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Anonymous Coward

Re: so what is he exactly buying?

"Problem 2 is that even if he got away with using the name, Dell the PC company would still exist, and people would associate the services with the PCs regardless of any actual association. So his new services company would still be hostage to the image of the PC company."

Exactly, if he were to pull a Ross Perot and just start another company to accomplish whatever his vision is for Dell, why would he want to take on all of the baggage that goes along with the Dell, the company, name? Dell has a brand image as a PC company, and not one with particularly innovative products or strong customer service. He would be better off just calling the company some meaningless, vaguely progressive name, such as Andersen Consulting did when they renamed themselves Accenture.

As for Dell's strategy, it isn't very difficult to figure out what he wants to do... be more like IBM (HP is doing likewise). Dell hired a bunch of former IBM executives to try to remake the company in IBM's image.

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Unhappy

Re: so what is he exactly buying?

Wall Street is a real danger to any company that wants to succeed in the long term.

WS is only interested in how much money can be made in the next quarter, they don't care (in the here and now), whether the company will still be profitable or even around in 2 years time, just so long as they sell the shares for a profit.

A company that tries to invest in the future and looking towards long term ROI has to really struggle, because WS aren't interested whether the company can find a nice and see exponential growth in 5 or 10 years. If they can't do it in 5 to 10 weeks, they shouldn't be doing it, regardless of whether it would make more money in the long term.

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Bronze badge

Re: Wall Street is a real danger to any company that wants to succeed in the long term.

How right you are!!!

This sentence could use a slight re-write:

...as it is a founder looking for a few key investors to help get control of his company out from under the unappreciative glare of Wall Street investors and the analysts who tell them what to think.

This is more like it:

...as it is a founder looking for a few key investors to help get control of his company out from under the unappreciative glare of unappreciative and fickle Wall Street investors and the analysts who tell them what to think.

Key words stricken are deleted words italicized, are inserted.

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Trollface

History

"I’d shut it down and give the money back to the shareholders."

Half way there.

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Holmes

Wall street is dangerous

The problem with Wall Street is that it is full of psychopaths. With a lot of money and the power that comes with it. People who do not care if they make a country or two go bankrupt when they get greedy. Putting a company on Wall Street is stupid. You are in fact better off by closing the company down and selling everything in it then putting it up for destruction on Wall Street.

So if Dell wants to save it self. It should go private during the weekend. There is no reason to wait until Monday to do so. The paperwork and such have to wait until Monday. As bureaucrats do not work during the weekend.

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Pint

Re: Wall street is dangerous

@jonfr -

Couldn't agree with you more. Michael Dell has gone up in my esteem (and I'm a long-term Mac user).

Anyone who tells the vampires & parasites (commonly known as bankers, analysts etc.) to go screw themselves deserves many beers for that alone.

More power to his elbow and I sincerely hope it all works out well for him.

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Silver badge

Maybe, oh just maybe...

They're gobbling up Quest. Dell (company) seems to be killing a certain useful piece of software Quest has, that is very good (a VDS solution) and there's no real replacement in the market. Maybe Dell (the man) might think otherwise?

Or maybe, just maybe, pull off non-MS hardware and not have to give a flying fudge? Private companies don't need to have ever-increasing profits.

Hell, everything's possible!

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Anonymous Coward

Flipper

Maybe Dell just wants to sell at a local maxima, and when "the deal" falls through, buy back again on the minima.... pump and dump, rinse and repeat, eventually he gets the brass enchilada.

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Stop

Re: Flipper

What does it mean to “get the brass enchilada? Is it like “showing someone the Golden Rivet”? I do hope not for Michael's sake...

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Coat

Re: Flipper

Or the Golden BB?

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Re: Flipper

"Maybe Dell just wants to sell at a local maxima, and when "the deal" falls through, buy back again on the minima.... pump and dump, rinse and repeat, eventually he gets the brass enchilada."

If you keep buying yourself lke that, eventually you'll go blind.

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Trollface

He should rename the company Dellbuntu and start shipping Debuntu with the PCs, they'll sell like hot cakes!

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Trollface

Just like

Bruce Wayne, Wayne enterprise.

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Anonymous Coward

Mickey don't have enough billions

After eating a box of krispy Kreme donuts for lunch everyday for the past 35 years, insiders suggest that Mickey, he don't gotz enough bread to buy himself but he has enough pounds for two people.

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