Dell returns to the stock market after months of struggle

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It was a wish that had long been cherished by Dell. The company wanted to go back on the stock market. Today, shareholders have given their consent. The IPO takes place in a small detour; the company takes over the shares of its listed subsidiary VMware.

Today it was announced that 61 percent of the shareholders agreed to the deal. The company pays $120 per share, with a total of $23.9 billion. This means that Dell will return to the fair on 28 December. It is uncertain how Wall Street will deal with the huge debt burden of the computer manufacturer.

Months of struggle

Dell took over EMC for 67 billion dollars two years ago. As a result, it still has a debt burden of USD 50 billion. But Chairman and CEO Michael Dell is satisfied. He has achieved the results he wants to achieve: With this vote, we simplify the capital structure of Dell Technologies in line with the interests of our investors.

The deal puts an end to a six-month struggle within Dell, its investors and activist investors including Carl Icahn and Elliott Management. They found the deal unfair because VMware shares would fall in value in favour of Michael Dell and Silver Lake. Together, they invested some $10 billion in Dell when the company was delisted in 2013.

The deal is also a concession from Michael Dell’s address. He took the company off the stock exchange after he felt that the public market did not allow him enough time to look at the long term. The company’s CEO felt that he could only look ahead one quarter at a time and that was not enough to keep the company going.

With this new IPO, Dell is a fairly unique party, which first started as a private company. In 1988, the company went public and in 2013 Michael Dell bought back $24.4 billion of shares with the help of a few investment groups.

This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.