The world’s largest private tech company Dell has returned to public markets after it brought the tracking stock of its 81 percent owned VMware unit.
Dell’s return to the New York Stock Exchange (NYSE) under the DELL symbol was achieved in a cash-and-stock deal worth nearly $24 billion.
The decision to purchase the VMware tracking shares allowed it to bypass the traditional initial public offering (IPO) process which would have involved close scrutiny of its $52.7 billion debt pile – racked up thanks in part to its expensive takeover of EMC in 2016.
Dell had first mooted the idea of a return to public trading in February 2018, but officially announced in July that it was going to return to public markets five years after it contentiously went private.
Dell then met with investment banks in October to discuss options.
Dell’s return to public trading is a remarkable move considering the fierce battle that founder and CEO Michael Dell had to take the company back into private hands in 2013.
Five years ago Michael Dell claimed that operating as a private company, would allow Dell to be flexible and take a long term strategy – something that was difficult with the constant glare of shareholders.
On top of that, Michael Dell told Dell EMC World in 2017 that being privately owned removes the potential issue of employees or customers being influenced by “activist shareholders” trying to influence the business strategy, which Dell highlighted as being a growing trend.
And there is little doubt that Dell has had a tough time with activist shareholders in the past.
It should be remembered that Michael Dell and activist investor Carl Icahn have a very bitter history indeed, after Icahn fought vigorously against Michael Dell’s $24.4 billion (£15.6bn) buyout proposal to take Dell back into private hands in 2013.
Michael Dell was eventually victorious, and by taking Dell into private ownership again, it allowed the firm to continue its transformation from a predominantly hardware-focused PC company, to an end-to-end solutions provider – away from the constant glare of Wall Street and investors.
Dell shares opened at $46 on Friday, which gave it a market valuation of approximately $16 billion.
The firm has reported a 15 percent rise in revenue in its latest quarter, and apparently expects total adjusted revenue for 2019 to be in the $90.5 billion to $92 billion range.
Dell is still reportedly the world’s third largest PC market with a 17 percent market share, behind market leader HP (23 percent) and Lenovo (21 percent).
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