updated 05:07 pm EST, Mon January 14, 2013
Buyout talk sends Dell up more than 12 percent
Computer manufacturer Dell saw its shares rise sharply today on news that the company is in talks to go private. As of the close of the trading day on Monday, Dell shares were trading on NASDAQ at $12.29, up 12.96 percent, though shares were up nearly 18 percent earlier in the day due to rumors that the company was in talks with a number of private equity firms for a possible buyout. Dell, still a significant player in the PC market, has faced declining profits and slumping shipments along with most other PC manufacturers as consumers increasingly opt for smartphones and tablets over traditional computing form factors.
The buyout talk came from Bloomberg, which cited sources familiar with Dell's ongoing discussions with at least two private equity firms. The report noted that the deal is still in the formative stages, as potential buyers might have trouble securing funding.
Whereas Dell on January 11 had a market value of $18.9 billion, the buyout talk pushed that figure up to $21.35 billion today.
Dell has for some time been looking to at least partially transition away from the consumer computing sector, announcing $2 billion in cost cuts in June of last year after reporting a 33 percent drop in profits the month before. Figures late last year from Gartner showed Dell's market share dropping nearly 21 percent year-over-year, with shipments down by nearly 2.5 million units from the year before. Dell's stock has dropped nearly 39 percent over the last five years.