Dell’s return to stock market leaves a bitter taste
@Carl Icahn knew what he was talking about. In September 2013 when he conceded defeat over his plan to stop @MichaelDell’s $25bn buyout of the Texan’s eponymous computer company, he said the founder’s bid “freezes stockholders out of any possibility of realising Dell’s great potential”.
Five years later, we know what that potential was. Mr Dell and his sidekicks at the investment firm Silver Lake Partners took Dell private in that deal, which closed in 2014. The group is now about to relist Dell’s shares, via a complex transaction, after turning the once moribund PC maker into a broad-based provider of corporate technology that has an estimated equity value of about $70bn. Based on that valuation, Mr Dell will have turned a $4bn investment into $32bn. The roughly $2bn Silver Lake invested in Dell since the buyout will be marked at $12bn.
The 2013 Dell management buyout became a touchstone on corporate governance, activist investing and private equity. Despite anger and allegations, there were no official findings that Dell’s ordinary shareholders were short-changed by either the Texas tycoon or the Dell directors who were supposed to be looking out for them. But the sense that Mr Dell pulled a fast one on Dell shareholders — as well as those of EMC, a massive software vendor that Dell took over in 2016 for $67bn— has lingered. Their windfall profits, soon to be crystallised, are just the latest proof for those who have been sounding the alarm that America is too lax in scrutinising the actions of chief executives and boards of directors.