An internationally renowned proxy advisory council going by the acronym of ISS gave the thumbs down signal to activist investors. They had been trying to shift the date for the buyout of Dell. The $24.4 billion deal has gained the approval of the ISS. According to Bloomberg, the activist horde led by Carl Icahn was the loser in the transaction. According to the ISS, the ideas behind the activist’s actions were too precarious and tedious. Had the ISS done otherwise a whole different scenario would have emerged. The investors would have further made plans to overthrow the Dell board of trustees and the billionaire owner. This scary scenario was deemed too risky by the ISS. It would have been a long drawn affair indeed.
However, that didn’t happen. What did happen and what is about to occur is the hammering of the final nail into the coffin for Icahn. While the activists form a fairly large group, they won’t make it. For Icahn to win it needs much more support than it presently has. The ISS didn’t dismiss Icahn due to Dell’s misgivings. Rather it found intrinsic faults in the whole set up and therefore switched its allegiance.
The ISS seems to have given a blank check to the founder of Dell to privatize the company. As the PC market is in a slump, this act of privatization will benefit Dell immensely. The process was long indeed. Over the past ten months, the ISS reviewed Dell’s business plans. Finally, after thoroughly scrutinizing the statistics, it gave its stamp of approval much to the delight of Dell. Meanwhile, a result of all this buyout activity has been a rise in Dell’s shares in the market. They jumped by 2.9%. Basically, what has happened is that Michael Dell has auto-cannibalized his own company.
Michael Dell promises that he will take his company back to the top again. All he needs is some time and resources. Diversification is the watchword. Dell was making some of the most sophisticated PC laptops the world had ever seen before the downturn in the market upset its plans. The very story reeks of tragedy. The very thing which was once its crowning glory became a weak point. But Dell still has the capacity to reverse its fortunes. It will take some work but then there isn’t anything worth fighting for that doesn’t take effort and patience to reach.