After a 5-year private reboot, Dell is coming back to the public market

After going private to reorganize internally, Dell returns to the public market with a new outfit.

July 3, 2018

Dell is returning to the public market after a 5-year stint as a private company to diversify beyond its primary revenue stream (computer hardware).

Dell wanted some privacy for its makeover

Michael Dell built the company he started in his dorm room into the world’s largest computer-maker by the mid-2000’s. But, by 2013, Dell had slipped behind HP and Lenovo. Unhappy with bronze, Dell decided to take the company private for $25B

Outside of public market scrutiny, Dell revamped its non-hardware offerings, buying data storage company EMC Corp for $67B in 2016.

To finance the historic acquisition, Dell issued a tracking stock (a stock issued by a parent company to mirror, or “track,” a smaller subsidiary while the original company undergoes a facelift) for its subsidiary, VMware.

Now, Dell’s ditching the training wheels

Over 5 years, Dell succeeded in diversifying its software offerings to become a one-stop computing shop for businesses. But in doing so, it racked it up $52.7B in debt as of last quarter. 

To make up for the cash shortfall, Dell had to return to public markets. They bought their own tracking stock for $21.7B — allowing for tight control and outside investment — and now, Dell and VMware will operate more independently. 

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