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Technology Stocks : Dell Technologies Inc.
DELL 133.59-1.8%Dec 3 3:59 PM EST
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To: kemble s. matter who wrote (147820)11/22/1999 2:47:00 PM
From: Chuzzlewit  Read Replies (1) of 176387
 
Kemble,

Much of what you say is true, but the question remains: how would IBM benefit from a passive 30% investment in DELL?

Certainly, IBM's operating efficiencies can use Dell's expertise. And certainly, Dell benefits from access to IBM's technology. But these goals can be achieved through partnerships. They do not require equity investments, and since the point of an equity investment is to generate a return on the cash invested, I simply don't see the point of a minority stake from IBM's perspective.

Of course, IBM could try to acquire Dell, but that would be extremely expensive, and considering the dilution, I guess it would have to end up offering something in the neighborhood of 0.7 shares of IBM (or more) for each share of DELL to entice Dell to consider the deal. So I dismiss the equity stake talk as just idle chatter.

TTFN,
CTC
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