{"id":36146,"date":"2013-02-12T15:39:45","date_gmt":"2013-02-12T20:39:45","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=36146"},"modified":"2013-03-10T21:50:44","modified_gmt":"2013-03-11T01:50:44","slug":"sizemore-on-the-dell-shareholder-revolt","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/02\/12\/sizemore-on-the-dell-shareholder-revolt\/","title":{"rendered":"Sizemore on the Dell Shareholder Revolt"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

Charles Sizemore gave his thoughts Erika Morphy of the E-Commerce Times on the shareholder revolt that is threatening to de-rail the leveraged buyout of Dell (NYSE:$<\/span>DELL<\/a>)<\/strong> by a group led by founder Michael Dell:<\/p>\n

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These investors have valid points as they make their case against the LBO, said Charles Sizemore, manager of the Dividend Growth<\/a><\/strong> and Tactical ETF<\/a><\/strong> models at Covestor.<\/p>\n

“Applying a P\/E ratio of just 12 would get you a stock price of nearly $18. Applying a price\/sales ratio of just 1 would get you to $33 per share,” he told the E-Commerce Times. “Even though Dell’s offer to pay what amounted to a 25 percent premium over the pre-announcement market price, there is a case to be made that it is far too low.”<\/p>\n

Indeed, if Michael Dell raises his price, Dell would presumably have to take on more debt to make the deal happen, Covestor’s Sizemore said. “Having too high a debt load is risky for a company in a fast-changing sector like tech.”<\/p>\n

What Dell can do to bring these shareholders on board with the plan is unclear.<\/p>\n

Dell could change the terms and raise the price above the $13.65 that’s on the table, suggested Barry Randall, who runs the Crabtree Technology Model for Covestor.<\/p>\n

It could include a one-time dividend payment to current, pre-private investors, he added.<\/p>\n

Dell could also remind investors that the share price had been languishing and that the market had largely given up on the stock, Sizemore said.<\/p>\n

Dell is worth more than what was offered, but the bottom line is that a company is only “worth” what someone is willing to pay for it, Sizemore maintained.<\/p>\n<\/blockquote>\n

To read the full article, follow this link<\/a><\/strong>.<\/p>\n

SUBSCRIBE <\/a><\/strong>to Sizemore Insights<\/em>\u00a0via e-mail today.<\/p>\n

The post Sizemore on the Dell Shareholder Revolt<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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