Why Michael Dell Can Afford to Be Bolder as a Private Owner

 
 
By Chris Preimesberger  |  Posted 2014-05-22 Email Print this article Print
 
 
 
 
 
 
 
Michael Dell

EXCLUSIVE: Dell founder and CEO: "There's a plague of short-term thinking … and it's very dangerous. We've freed ourselves from that."

LAGUNA BEACH, Calif.—Seven months after Dell Inc. returned to private ownership following a hard-fought $25 billion stock buyout and 25 years on the NASDAQ index, Michael Saul Dell said he loves the feeling of his namesake enterprise being private again.

No longer do the CEO and his leadership team have to worry about contentious stockholder meetings, loud-mouthed and/or short-sighted investors, quiet periods and additional public sector-related duties he considers "nonsense."

In an onstage conversation with IT analyst Mark Anderson at the 12th annual FiRE (Future in Review Conference) and later in a one-on-one interview with eWEEK, Dell said that going private enables his company to think more long range about projects and financial results, rather than on arbitrary, performance-based financial quarters.

"As a private company, we can be bold," Dell said. "As a public company, with everything you do, you think, 'How is this going to impact the quarter?' This is not altogether bad, but if you really want to join the circus, tune into any public company's annual shareholders' meeting. There's just a lot of noise there that doesn't have anything to do with customers or solving problems.

"As a private company, we feel we have the privilege to innovate and be bold, and to think about our business in a much longer-term context. If you step back and look at our society, there's a plague of short-term thinking—in education, in politics, in finance—and it's very dangerous. We've freed ourselves from that."

Other CEOs Have Asked Dell About Going Private

Dell candidly revealed that he's had "more than 10 public-company CEOs contact me in the last year and ask me about this [going private]."

"And what are their names?" Anderson joked. "Well, I am in a quiet period about that right now," Dell said with a laugh.

Dell and his company have been true survivors in the cutthroat world of IT products and services. The 49-year-old industry icon reminded conference attendees about some of the financial accomplishments his namesake company has recorded in the 30 years since he started it in his University of Texas at Austin dorm room. They included the following:

--Dell's revenues have totaled a little more than $780 billion. "Anybody want to race to a trillion?" Dell quipped. "We'll get there in about four or five years."

--The company's return on equity over the last 90 quarters, or about 22 or 23 years, has averaged about 44 percent.

--While Dell was public for 25 years until late 2013, the stock appreciated 13,500 percent—27 times better than the Standard & Poor's 500.

Dell is, by far, the largest enterprise in any sector to take itself private, Dell said.

"It feels great [to be private again]. There's a whole lot of stuff I don't have to do anymore that was kind of nonsense," Dell said. "Now we can focus on growing our business, invest in R&D, creating with new solutions—continuing the progress the company has been on.



 
 
 
 
Chris Preimesberger

Chris Preimesberger is Editor of Features & Analysis at eWEEK. Twitter: @editingwhiz

 
 
 
 
 
 
 
 
 

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