Michael Dell bought $100 million of Dell (NASDAQ: DELL) stock. He clearly wants the market to believe he has faith in the health of the company he founded. His action may actually take the firm’s shares higher, temporarily.
The purchase will mean much less to the market than Dell might hope. The PC company is still viewed as a maker of small computers and servers without the software and services businesses that rivals like Hewlett-Packard (NYSE: HPQ) and IBM (NYSE: IBM) have.
While HP and IBM shares have done well this year, Dell’s have not.
Michael Dell already owns 230 million shares of Dell stock. His $100 million investment is extremely modest and will certainly not make Wall Street ignore the firm’s many weaknesses.
Dell is not only late to some of the highly profitable markets that its rivals now control. It is so late that it will be costly to get market share, if it can get any at all.
Michael Dell will always be blamed for being too slow to realize that the tech market moved away from his company’s focus long ago.
Douglas A. McIntyre