If history is any indicator, we may see some top spots in coming years. And if Mr. Dell's leadership record is not enough, consider the company's strengths, including customer loyalty. Dell didn't lose a single large customer during the choppy waters of the past year. In fact, some of its large clients drafted contingency plans in case Mr. Dell would no longer be the CEO.
Imagine the progress that can be made when Mr. Dell holds the reins and is only responsible to the primary shareholder, himself. Reason 2: Less paperwork, more productive work As a private enterprise and unlike its primary competitors, Dell is not required to meet shareholder or analyst expectations. Plus, the company can forego quarterly or annual filings with the SEC, expensive IR associated costs, and dividend and buyback measures, among other processes involved with being a public company.
Assuming Dell spent the same amount on dividends and buybacks as it has the past 5 years, this cash flow would exceed the monthly interest payments to the banks that lent cash to Dell for the buyout. That equation is pretty good, especially considering the potential future dividend increases had it stayed public and the extra cash it will have to invest or pay down additional debt.
Dell's vision to transform his company into a global powerhouse that emphasizes customer needs and a long-term time horizon. Under a new private ownership structure, Dell will be even more flexible and entrepreneurial, allowing it to do what it does best — to serve our customers with a single-minded purpose and drive the innovations that will help them achieve their goals. We will be better positioned to shape the forces of cloud, big data, mobile and security that are changing the way people live, businesses operate and the world works, just as we did when we helped revolutionize the power of the PC almost 30 years ago.
Focus on serving customers Our focus remains squarely on our customers, creating value in their lives and for their organizations. Dell is a leading provider of end-to-end scalable solutions for customers around the world. New investors will get a say, of course, as well as their fair share of any profits. But the arrangements will leave Michael Dell with more control than most traditional public companies.
That tight grip has benefited the company and Michael over the past five years. A newly public Dell would leave Michael Dell in the best position yet: at the head of his company, with all the gains from the growth while private but far fewer of the risks that come without public support. There are still plenty of questions for the future, though. As Lowery further points out, Dell also essentially has to reenter the market now.
It remains to be seen whether Dell has learned any of the lessons from this cycle: will the company figure out a way to continue to grow with the changing market, expand into new fields, and anticipate new trends?
Or will we watch in another decade as the company retreats from the public sphere again to lick its wounds and see if it can figure out the next way to stave off defeat? There is little history to suggest whether going private makes such a transition easier. Analysts say the resulting debt load hurt its ability to compete in the capital-intensive chip business. Freescale cut just under 5 percent of its work force last year as it continued to restructure.
News of the talks first emerged on January 14, although they reportedly started in the latter part of Michael Dell had previously acknowledged thinking about going private as far back as Goldman Sachs was financial adviser, and Hogan Lovells was legal adviser to Dell.
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