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Dell's Ugly Earnings: 5 Takeaways
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StacyG488
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StacyG488,
User Rank: Apprentice
8/26/2013 | 9:23:03 PM
re: Dell's Ugly Earnings: 5 Takeaways
It's not Dell, it's that the company's focus is on on a product that people simply don't buy any longer. How can Dell out innovate Google or Apple? or out market IBM and SalesForce.com? Until they can answer that question the company will continue to suffer.
ANON1234369798209
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ANON1234369798209,
User Rank: Apprentice
8/20/2013 | 2:52:17 PM
re: Dell's Ugly Earnings: 5 Takeaways
As a former employee (in the 90s), I can say that Michael isn't a bad manager, but a poor judge of executive management. His employees were always top notch and gave 100%, but the growth in the 90s led to the hiring of terrible executives from defunct companies. This changed the culture and provided the stagnation that threatens corporate solvency today. Perhaps the company needs to be private to shift gears, but it seems to be more about transforming the culture than the business model (see IBM with Gerstner)...
melgross
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melgross,
User Rank: Ninja
8/17/2013 | 7:32:56 PM
re: Dell's Ugly Earnings: 5 Takeaways
It's not likely that Icahn is doing this to prevent companies from going private. He sees an opportunity here for himself, and that's why he's doing it. This is the same as his recent purchase of $1 billion of Apple shares, where he's going to try to persuade Apple to purchase a total of $150 billion in stock, something he will fail in.
jries921
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jries921,
User Rank: Ninja
8/17/2013 | 6:27:40 PM
re: Dell's Ugly Earnings: 5 Takeaways
I agree that the news actually strengthens Mr. Dell's case for taking the company priviate, but Mr. Icahn makes his money as a stock speculator and "activist shareholder" (aka corporate raider), so the last thing he wants is a wave of large publicly traded corporations going private; ergo, it's in his interest to make it as inconvenient and expensive as possible for Mr. Dell and his partners to carry out their plans, lest other publicly traded corporations be encouraged to follow their example.

Carl Icahn isn't going to give up unless he's bought off, loses the last appeal, or it becomes ruinously expensive to keep up the fight.
melgross
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melgross,
User Rank: Ninja
8/17/2013 | 6:21:23 PM
re: Dell's Ugly Earnings: 5 Takeaways
A number of us have been asking the same question. Mr. Dell, and his management team should have been removed from running the company while this process is being worked out. It's certainly to his advantage to make the company look as bad as possible during the attempts to buy it out.

The problem is that the continued poor decision making, which we've been seeing Mr. Dell make since he came back, makes it difficult to show that anything happening now is by design rather than by, well, continued poor decision making. He's clearly not capable of running the company.
melgross
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melgross,
User Rank: Ninja
8/17/2013 | 5:58:11 PM
re: Dell's Ugly Earnings: 5 Takeaways
But what does that mean, exactly? Do they continue to rely on Microsoft for the OS, because of their business dealings with them? If so, the outcome won't change.

If they make Android tablets they will just become another Android licensee, with no guarantee that sales will be any better than any number of secondary players. And with most of those players, we have to question whether profits are to be had in that business at those low prices, with bot Amazon and Google stating that profits aren't of interest to them in actual tablet sales.

Other manufacturers can't look at profits from their hardware in such a cavalier fashion, as they have no large ecosystem from which to attempt to recover some profits from (though its debatable if Amazon will ever profit from their tablets in any way, once you crunch the numbers).

Going private does nothing, really. It limits their going and getting lines of credit. It limits their ability to buy companies they think are useful to them, and it certainly doesn't improve the poor management skills Mr. Dell has. In reality, all it does is to put the continued decline of Dell behind closed doors.
Cara Latham
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Cara Latham,
User Rank: Apprentice
8/17/2013 | 2:43:12 AM
re: Dell's Ugly Earnings: 5 Takeaways
I have to agree with both of you. As a user of both a MacBook and an iMac myself, I haven't had to replace either in a very long time. I purchased my iMac in 2006, and the only thing I've had to replace on it since then was a $90 power supply part.

Perhaps if Dell can come up with technology and hardware that is as reliable and durable, when it comes time for consumers to make a purchase, they will consider it. But I don't see people rushing to buy new PCs in droves. I think the drop will stabilize, but sales will never return to the levels they once were.
D. Henschen
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D. Henschen,
User Rank: Author
8/16/2013 | 8:43:31 PM
re: Dell's Ugly Earnings: 5 Takeaways
So Dell (the person and the company) has good reason to sandbag results to promote the go-private plan? I was never a fan of Icahn and his ilk, but maybe there's a place for such activists. Good thing being an editor of a tech publication prevents me from investing in technology companies as a matter of policy. I have one ETF that contains shares of every tech stock out there, but I can't directly invest in (or short) companies that I personally cover or that InformationWeek covers.
Michael Endler
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Michael Endler,
User Rank: Author
8/16/2013 | 7:05:56 PM
re: Dell's Ugly Earnings: 5 Takeaways
I think you have a good point. People are delaying PC purchases because a) older machines are still "good enough"; b) tablets are cheap, more than capable for most things, and even better than laptops in some cases. But yeah, I'd rather have a MacBook Pro than any iOS, Windows RT or Android tablet in existence. At some point, I think it will stabilize. But I don't think it will ever be as big as it used to be.
Laurianne
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Laurianne,
User Rank: Author
8/16/2013 | 7:05:05 PM
re: Dell's Ugly Earnings: 5 Takeaways
I can't imagine Michael Dell not playing hard in the mobile game once the company goes private. It's too important, services focus or no.
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