

Dell Founder Said to Seek Majority Control Using Personal Funds - hkmurakami
http://www.bloomberg.com/news/2013-01-30/dell-founder-said-to-seek-majority-control-using-personal-funds.html

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niggler
Fun fact: Dell's current market cap is 23B. They spent more than 39B over the
past 16 years on stock buybacks.

It's the posterchild for stock buybacks gone wrong.

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meric
What do you mean? That just says to me Dell has returned a lot of money to
shareholders.

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niggler
If they paid dividends, it would have been returned to the shareholders (both
long and short)

At the end of the day, buybacks benefit those who tender shares into the
buyback at the expense of the other shareholders (the buyback would have to
happen at a price above the market price at the time of the buyback, so that
net loss is attributed to people who are still holding the stock.) This would
be worthwhile if the company can grow earnings and profits enough to
compensate for the short-term expense, but that doesn't happen most of the
time.

Taking the long view, dell was $15/sh back then. If you just held for 16 years
you'd be down nearly $2/sh. If they paid a dividend instead of a buyback,
you'd have received at least $20 in dividend during that time (and the stock
price, all else equal, would be higher)

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schumitsch
If you want really want dividends instead of a buyback, just sell your shares
in proportion to the percent of the company bought back.

It's logically the same thing. In both cases you have the same amount of cash
and the same ownership of the company (although, you do have to pay a
transaction fee to sell shares).

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niggler
The two things seem the same but are different (as far as taxes are concerned)

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jaggederest
Not since dividends are treated the same as long term capital gains. Unless
you've been holding your shares less than a year, you're fine.

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niggler
Tendering shares for which you have a capital loss triggers a capital loss
event, and the amount that you can take a tax loss is limited by other factors
(whereas you have to pay full penalty for gains, for losses there is a limit
at the individual level). It's not symmetric

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shizcakes
Silver Lake LLC -- were they not the people who also screwed over the Skype
folks during that acquisition?

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nextparadigms
Certainly better than letting Microsoft control the company. That would
guarantee they're stuck in the "PC world" forever, for better or for worse.

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confluence
Throwing good money after bad?

Dell circa 1997 wouldn't approve.

 _> "I’d shut it down and give the money back to the shareholders"_

\- Dell (on Apple)

But more seriously, you gotta give the guy credit for trying to save his baby.

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corin_
If this rumour does happen then he _is_ giving the money back to the
shareholders.

