Hot Rumor: Dell in Talks to Go Private

Hot Rumor Dell in Talks to Go Private 300x168 Hot Rumor: Dell in Talks to Go PrivateWith the PC industry lagging behind its former glories amidst a mobile revolution dominated by tablet and smartphone market penetration, Dell is among the most iconic names in PCs to find itself struggling in response to the mobile revolution.

As a result, speculation is rampant that Dell may take the company private. Talks with more than one private equity firm is ongoing.

“The discussions are preliminary and could fall apart because firms may not be able to line up the needed financing or resolve how to exit the investment in the future,” sources close to the matter tell Bloomberg.

Taking the company private could help Dell, the third- largest PC maker, accelerate efforts to revive growth and cope with competition without quarter-by-quarter scrutiny from public shareholders.

“The stock has not done much, and he’s under pressure to boost numbers,” Abhey Lamba, an analyst at Mizuho Securities USA Inc., tells Bloomberg. “He wants to de-emphasize about two-thirds of his business, and that’s a hard strategy to push because it would mean overall revenue will shrink.”

As MMW reported Thursday, it’s difficult to make an argument for the general health and vitality of the PC industry when you start seeing numbers like these.

Based on the latest quarterly estimates from IDC, Q4 PC shipments fell to 17.75 million. That number was 18.6 million during Q4 of 2011. It goes without saying that a negative growth rate of 4.5 percent is not giving analysts and industry watchers much hope for PC shipments in 2013.

Do you think Dell would be wise to go private? Please weigh in with a thought or comment below.



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