Dell Founder Said to Seek Majority Control Using Personal Funds
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Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#2Silver Lake LLC -- were they not the people who also screwed over the Skype folks during that acquisition?
Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#3Fun fact: Dell's current market cap is 23B. They spent more than 39B over the past 16 years on stock buybacks.
It's the posterchild for stock buybacks gone wrong.
Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#4Fun fact: Dell's current market cap is 23B. They spent more than 39B over the past 16 years on stock buybacks. It's the posterchild for stock buybacks gone wrong.
What do you mean? That just says to me Dell has returned a lot of money to shareholders.
Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#5Fun fact: Dell's current market cap is 23B. They spent more than 39B over the past 16 years on stock buybacks. It's the posterchild for stock buybacks gone wrong.
What do you mean? That just says to me Dell has returned a lot of money to shareholders.
If they paid dividends, it would have been returned to the shareholders (both long and short)
At the end of the day, buybacks benefit those who tender shares into the buyback at the expense of the other shareholders (the buyback would have to happen at a price above the market price at the time of the buyback, so that net loss is attributed to people who are still holding the stock.) This would be worthwhile if the company can grow earnings and profits enough to compensate for the short-term expense, but that doesn't happen most of the time.
Taking the long view, dell was $15/sh back then. If you just held for 16 years you'd be down nearly $2/sh. If they paid a dividend instead of a buyback, you'd have received at least $20 in dividend during that time (and the stock price, all else equal, would be higher)
Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#6Earlier quoted context omitted.
What do you mean? That just says to me Dell has returned a lot of money to shareholders.
If they paid dividends, it would have been returned to the shareholders (both long and short) At the end of the day, buybacks benefit those who tender shares into the buyback at the expense of the other shareholders (the buyback would have to happen at a price above the market price at the time of the buyback, so that net loss is attributed to people who are still holding the stock.) This would be worthwhile if the c…
How is this outcome bad?
Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#7Earlier quoted context omitted.
What do you mean? That just says to me Dell has returned a lot of money to shareholders.
If they paid dividends, it would have been returned to the shareholders (both long and short) At the end of the day, buybacks benefit those who tender shares into the buyback at the expense of the other shareholders (the buyback would have to happen at a price above the market price at the time of the buyback, so that net loss is attributed to people who are still holding the stock.) This would be worthwhile if the c…
If you want really want dividends instead of a buyback, just sell your shares in proportion to the percent of the company bought back.
It's logically the same thing. In both cases you have the same amount of cash and the same ownership of the company (although, you do have to pay a transaction fee to sell shares).
Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#8Earlier quoted context omitted.
If they paid dividends, it would have been returned to the shareholders (both long and short) At the end of the day, buybacks benefit those who tender shares into the buyback at the expense of the other shareholders (the buyback would have to happen at a price above the market price at the time of the buyback, so that net loss is attributed to people who are still holding the stock.) This would be worthwhile if the c…
How is this outcome bad?
Under the buyback, long-term investors who have held on for the 16 years have lost nearly $2/sh.
Under the dividend they would have made at least $18/sh.
There's a positive feedback cycle: Companies show a disregard for long-term shareholders; large investors, seeing how they are being ignored, focus on short-term investments; Companies see that investors are interested in the short-term and don't play the long game.
Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#9Earlier quoted context omitted.
If they paid dividends, it would have been returned to the shareholders (both long and short) At the end of the day, buybacks benefit those who tender shares into the buyback at the expense of the other shareholders (the buyback would have to happen at a price above the market price at the time of the buyback, so that net loss is attributed to people who are still holding the stock.) This would be worthwhile if the c…
If you want really want dividends instead of a buyback, just sell your shares in proportion to the percent of the company bought back. It's logically the same thing. In both cases you have the same amount of cash and the same ownership of the company (although, you do have to pay a transaction fee to sell shares).
The two things seem the same but are different (as far as taxes are concerned)
Re: Dell Founder Said to Seek Majority Control Using Personal Funds
#10Earlier quoted context omitted.
If you want really want dividends instead of a buyback, just sell your shares in proportion to the percent of the company bought back. It's logically the same thing. In both cases you have the same amount of cash and the same ownership of the company (although, you do have to pay a transaction fee to sell shares).
The two things seem the same but are different (as far as taxes are concerned)
Not since dividends are treated the same as long term capital gains. Unless you've been holding your shares less than a year, you're fine.