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Dell, Under Siege, Overpays For 3Par (PAR)

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By Douglas A. McIntyre Updated Published
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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

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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