In my 55 years in the investment business I would be hard pressed find a bigger boondoggle than the Dell situation. Dell should be capable of paying shareholders a $5 dividend from their excess cash and earning power. That action would probably reduce the price of Dell's stock to about $8 a share.
The $8 a share stock would be earning somewhere around $1.30 to $1.60 a share. This would enable them to pay as much .70 or .80 cents a share annual dividend, yielding close to 10%.
Whatever savings Mr. Dell plans to make after the company is private would be welcomed by shareholders while it is public and should add further to earnings.
The idea that those actions can't be taken because Dell is a public company borders on the absurd, and seems to be an attempt to confuse smaller shareholders.
Obviously there are risks in the fundamentals of the PC industry, but do not deceive yourself. It is totally illogical to think that Mr. Dell would put his shares into the new company plus almost 1 billion dollars on top of the leverage created, if he didn't expect a hefty return.
Give us a break Mr. Dell...investors aren't that stupid.
The $8 a share stock would be earning somewhere around $1.30 to $1.60 a share. This would enable them to pay as much .70 or .80 cents a share annual dividend, yielding close to 10%.
Whatever savings Mr. Dell plans to make after the company is private would be welcomed by shareholders while it is public and should add further to earnings.
The idea that those actions can't be taken because Dell is a public company borders on the absurd, and seems to be an attempt to confuse smaller shareholders.
Obviously there are risks in the fundamentals of the PC industry, but do not deceive yourself. It is totally illogical to think that Mr. Dell would put his shares into the new company plus almost 1 billion dollars on top of the leverage created, if he didn't expect a hefty return.
Give us a break Mr. Dell...investors aren't that stupid.
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