January 14, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of PC giant Dell (NASDAQ: DELL ) suddenly skyrocketed today by upwards of 18% after Bloomberg reported that the company is thinking about going private.
So what: The report indicates that Dell is discussing the possibility with at least two different private equity firms, but talks could easily fall apart if the unnamed suitors are unable to acquire financing or come up with an eventual exit strategy. Multiple banks have supposedly been approached for financing the potential buyout.
Now what: The news comes as the PC market continues to struggle and Dell has lost a good chunk of its value over the past 12 months, which is why it continues to diversify toward IT services and away from PCs. This also isn't the first time investors have hoped for a buyout, as CEO Michael Dell confirmed in June 2010 that he had considered taking his namesake company private previously. A buyout would definitely be a happy ending for public investors.
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