Navigate this market better. Subscribe for FREE stock alerts and information.

Tuesday, February 5, 2013

For Silver Lake, Dell's beauty is in the eye of the beholder, (NASDAQ: DELL)

For years, many Wall Street investors wrote off Dell Inc as a dying personal computer company that has failed to adapt to a new era of tablets and smartphones. But Silver Lake Partners, one of the most respected technology investors in Silicon Valley, is betting about $1 billion that they're wrong. The private equity firm believes that Dell's computers, bundled with its growing enterprise business, will become a launchpad to offer one-stop software services for corporate clients.It's a risky gamble for Silver Lake: Dell is the firm's largest equity investment ever, it will only have a minority stake, and there is no clear exit strategy because obvious strategic buyers of Dell are scarce.The tech company is also dwarfed by IBM and Hewlett-Packard Co in the enterprise computing market, although Silver Lake thinks Dell can compete for smaller corporate clients by coupling its hardware with storage, networking, security, cloud and other software offerings."If you are a little 500-person company, there are not many people knocking on the door that have a lightweight low-cost solution to do that. All this complexity in enterprise plays into the favor of Dell," said a person familiar with the takeover consortium's plans.

Dell Inc. (Dell) is a global information technology company that offers its customers a range of solutions and services delivered directly by Dell and through other distribution channels. Shares of DELL traded higher by 1.13% or $0.15/share to $13.42. In the past year, the shares have traded as low as $8.69 and as high as $18.36. On average, 36091200 shares of DELL exchange hands on a given day and today's volume is recorded at 286686336.