Michael Dell: Repairing a legacy?

Feb 06 2013, 10:31 IST
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SummaryMichael once gave up control of his company - and everything began to go south.

still down by roughly half from when he regained leadership. Though, to be sure, HP's stock has also fallen about as much.

During that time the market changed dramatically, and Dell's once-iconic built-to-order PCs have lost favor as consumers and even businesses move toward tablets and smartphones, a market where Dell has taken tentative and unsuccessful steps.

That slide was magnified by Michael Dell's brash confidence, which sometimes got him in trouble with peers, most famously Apple's Jobs.

When Jobs returned to lead the company he started in 1997, Dell famously suggested the co-founder would be better off shutting the company and returning the cash to shareholders.

Nine years later, Jobs had the last laugh when Apple's market capitalization surpassed Dell's. Even given its recent share price slide, Apple remains more than 20 times bigger than the former PC industry darling.

With Dell now choosing to go private, much will hinge on the willingness of future partners to support his potentially costly turnaround effort. Some support has already been received via a $2 billion loan from Microsoft to help fund the deal.

"This gives him flexibility. The market wasn't valuing the company at where he thinks it should be worth and who knows that better than him," said Phil Silverman, managing partner at Kingsview Capital.

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