Tuesday, March 11, 2014
The Associated Press
SAN FRANCISCO - Dell's woes worsened during its most recent quarter as the slumping personal computer maker resorted to rampant price cutting to slow a sales decline driven by a growing reliance on smartphones and tablets to connect to the Internet and perform other technological tasks.
The discounting contributed to a 72 percent drop in Dell's fiscal second-quarter earnings.
The disheartening results announced Thursday could help Dell Inc.'s board persuade more of the company's stockholders that they're better off accepting a buyout offer from a group led by CEO Michael Dell rather than risk further financial deterioration in the months ahead.
After Dell's report came out, ISI Group analyst Brian Marshall advised shareholders to "take the money and run."
Shareholders are scheduled to vote on Michael Dell's $24.8 billion bid on Sept. 12. The proposal faces fierce resistance from two major Dell stockholders, billionaire Carl Icahn and investment fund Southeastern Asset Management, who contend the Round Rock, Texas, company is worth more than the $13.88 per share being offered by Michael Dell and his main ally, Silver Lake Partners.
The opposing arguments have been compelling enough to prompt Dell's board to delay the shareholder vote on the deal three times. Before the last delay, Michael Dell and Silver Lake agreed to pay a special dividend of 13 cents per share to supplement a bid that had already been raised from $13.65 per share to $13.75 per share.
Dell's stock dropped 5 cents to $13.65 in extended trading after the report came out.