Dell (NASDAQ: DELL) is not going to be able to buy its way out of trouble. The company and Michael Dell recently settled government charges which have damaged the founder’s credibility as a public company CEO.
Dell currently faces charges that it shipped millions of PCs to customers that some of its employees knew were defective.
Dell bought digital storage company 3Par (NYSE: PAR) today for an 86% premium to its share price as of Friday. That price was $9.56 and Dell’s purchase price is $18–in cash. It may be that the 3Par board would not take stock given Dell’s shaky prospects. The total price of the deal is $1.15 billion. What is particularly extraordinary is the 3Par has not traded above $13.67 this year. Nor has it ever been above that price since it went public. 3Par revenue for the June quarter was only $54.3 million, up 22%. 3Par actually lost $1.8 million for the quarter, the same as in the period a year ago.
Dell should have been able to make the buy-out at below $14.
Douglas A. McIntyre
It’s Your Money, Your Future—Own It (sponsor)
Retirement can be daunting, but it doesn’t need to be.
Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.