Forum List » Value Ideas and Strategies
Share and discuss value investing ideas and investing strategies.
New Topic
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicLog In
Does Dell Going Private Mean Anything For Microsoft?
Posted by: Intelligent Speculator (IP Logged)
Date: February 7, 2013 07:30AM

You might have heard that Michael Dell was taking his company private. How? He partnered with Silver Lake who is putting several billion dollars, both borrowed a ton of money, mostly at high interest rates but also $2B from Microsoft (MSFT). I have several thoughts on this deal and would love t hear yours. -Why go private? I’m certainly in favor of private equity (even considered working in it for a while) but this one intrigues me. Michael Dell seemed like he was in charge so what more can he do now that wasn’t possible when the company was public? If he had some brilliant ideas, was he waiting to take the company private (at a lower value) to start implementing them?

What is Microsoft’s play here?

Clearly, Microsoft is going through a lot of transformations these days. It is moving from its traditional software company to cloud based software, gaming and even building its first hardware device, the Surface. Is it based off of the Apple strategy? The fact that its recent tv ads are so similar to what Apple has produced certainly makes me wonder about it. One major hurdle that Microsoft faces about building hardware is that it has no experience/infrastructure. But Dell (DELL) does? Could this be the start of an alliance between the two?

Sure, it could simply be Microsoft putting some of its cash reserves to use but that seems unlikely doesn’t it? Microsoft, Apple and other companies with huge cash reserves rarely start behaving as hedge funds, trying to rack up big returns, etc.

Disclaimer: No position on Microsoft (MSFT)

Stocks Discussed: DELL, MSFT,
Rate this post:

Rating: 4.3/5 (3 votes)

Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat