DELL Returns To NYSE After Six Years Hiatus

DELL Returns To NYSE After Six Years Hiatus

 

Dell Technologies Inc recently returned to the public market, trading on the New York Stock Exchange under the symbol DELL and it looks to have received a fair welcome. Michael Dell, the founder of DELL had taken the company private over six years ago in what was at the time, the biggest buyout since the global recession in 2008.

 

DELL reentered the market after it bought back shares (DVMT.N) that tracked the financial performance of software maker VMware (VMW.N), in which Dell held an 81 percent stake. The cash-and-stock deal was worth nearly $24 billion.

 

Buying back the shares allowed Dell to bypass the traditional IPO process, which would likely have involved grilling by investors over the company’s $52.7 billion debt pile.

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Dell shares opened at $46 on Friday, marking its market valuation at $16 billion, as per Refinitiv data.

 

Dell was the lodestar of the computer hardware market in the early 2000s, leading online ordering of custom-configured PCs and working closely with Asian component suppliers and manufacturers to assure rock-bottom production costs.

 

But it lost sales massively, to a little over 10 percent in 2012’s fourth quarter on a fall in shipments over a misjudgment in strategy that saw it miss out on the industry shift to tablet computers, smartphones, and high-powered consumer electronics such as music players and gaming consoles over the next decade.

 

This compelled Michael Dell to take the company off the public market, and go down the path of acquiring other companies to help it broaden Dell’s role as an original PC manufacturer into areas like storage and servers, to networking and cyber security.

 

The strategy is in sharp contrast to that of rival HP Inc’s (HPQ.N), which separated from Hewlett Packard Enterprise Co (HPE.N) in 2016, based on the reasoning that two technology companies focused separately on hardware and services would be more efficient to operate.

 

But Dell’s strategy seems to be paying off, especially as corporates are increasingly turning to one-stop shops to help them manage their IT infrastructure on the cloud.

 

Dell reported a 15 percent rise in revenue in its latest quarter and said it expects total adjusted revenue in the range of $90.5 billion to $92 billion in 2019.

 

Dell is currently trailing rival HP Inc and Lenovo in the global PC market share index, coming third with a 17 percent market share. HP Inc (HPQ.N) and Lenovo Group (0992.HK) hold 23 and 21 percent respectively, according to data from Canalys.

 

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