Dell Has Hard Sell With Planned Buyout of Tracking Stock
Wall Street doesn’t think much of @DellTechnologies, and that could hurt @MichaelDell ’s plan to buy out the holders of a tracking stock for @VMware, the software company controlled by Dell. The now-private Dell has begun meeting with holders of both the tracking stock, Dell Technologies Class V (ticker: DVMT), as well as VMware (VMW) in what amounts to an IPO roadshow. Dell management, including Vice Chairman @Jeff Clarke and Chief Financial Officer @TomSweet, met today in Manhattan with a group of institutional investors, according to one investor present. The executives talked about the company’s recent financial and business progress and said it planned to hold an analyst day in September in an effort to better inform the investment community about the company. Dell is seeking to win over the tracker investors for a cash-and-stock transaction announced last week that has a stated value of $109 a share. The issuance of Dell common stock to the tracker holders in conjunction with the deal would allow Dell to go public without a conventional initial public offering. With the tracker trading around $94, an appreciable discount to the stated deal value, investors are effectively saying that the deal is worth around $100 a share, not $109.