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
Smart Investors Are Quietly Loading Up on These “Dividend Legends” (Sponsored)
If you want your portfolio to pay you cash like clockwork, it’s time to stop blindly following conventional wisdom like relying on Dividend Aristocrats. There’s a better option, and we want to show you. We’re offering a brand-new report on 2 stocks we believe offer the rare combination of a high dividend yield and significant stock appreciation upside. If you’re tired of feeling one step behind in this market, this free report is a must-read for you.
Click here to download your FREE copy of “2 Dividend Legends to Hold Forever” and start improving your portfolio today.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
