Pro,
I think GS holds the Dell puts. I also think the lower Dell's stock goes the more money the put holders make. I do agree that they appear to be pumping Dell's investment business and they may have some interest in the puts. GS may have sold a bunch of puts to others to spread the risk.
NW
UPDATE 1-Dell sees $700 million charge in 2nd-quarter
(adds background in paragraphs 3-6, stock movement in
paragraph 7)
NEW YORK, July 19 (Reuters) - Dell Computer Corp. <DELL.O>,
the No. 1 personal computer maker, on Thursday said it would
take a $700 million charge in the second quarter for job cuts
and other items, but that earnings and revenues would fall
within its earlier guidance.
Round Rock, Texas-based Dell said the company expected to
post revenues of $7.6 billion with earnings per share of 16
cents in the second quarter ending August 3, before a $700
million charge for the previously reported job reductions,
facilities consolidation, and asset impairments.
The charge roughly doubles the estimated hit Dell announced
in May, when it said it expected to take a one-time pretax
charge of $250 million to $350 million against its second
quarter earnings primarily related to cuts of between 3,000 and
4,000 jobs and facility consolidation.
Dell has promised to be ruthless on cost control, as the
personal computer market faces sluggish demand and a full-out
price war.
Dell's direct sales model, which allows it to pass on
falling component prices to its customers, is widely seen as
giving the company the upper hand against its rivals even as
overall PC demand weakens.
Dell, which took the top PC maker spot from Compaq Computer
Corp. <CPQ.N> this year, plans to release full second-quarter
results and provide third-quarter guidance on August 16.
Shares of Dell rose to $28.15 in pre-opening trade on
Instinet, up from Wednesday's close of $27.20
((New York Newsdesk, 646-223-6000))
REUTERS |
