Michael Dell adds almost $100 million of his company's stock
Founder now owns almost 11 percent of the company.
By Dan Zehr
AMERICAN-STATESMAN STAFF
Wednesday, July 02, 2008
A month ago, Michael Dell talked about the confidence he had in Dell Inc.'s prospects. This week, he's backed it up with almost $100 million.
Dell purchased $99.7 million worth of the company's stock in the past week, according to a regulatory document filed Tuesday. All told, the company founder and chief executive added more than 4.5 million shares to his holdings, bringing his stake in the company's stock to almost 11 percent.
He bought the shares in three lots over three days, at prices ranging from $21.89 to $22.39 per share. On average, he paid $22.14 a share. The company's stock price rose 30 cents Tuesday, closing at $22.18.
"The purchase is a personal investment decision by Michael, so he's not going to have a specific statement on it," said Jess Blackburn, a Dell spokesman.
Directly and indirectly through trusts and other plans, Dell holds more than 250 million shares of the company he founded in 1984. That does not include his stock options, which could add 10 million shares to his stake in the next six years.
During a May 29 conference call with analysts, Dell said he was encouraged by the acceleration he'd seen in the company's first-quarter growth. Strong sales of servers and notebook computers, combined with rapid growth in emerging markets, propelled Dell to stronger-than-expected revenue and profit totals for the period.
Market-leading results once were commonplace in Round Rock, but the company's sales and profit growth began to slip halfway through 2006, and Hewlett-Packard Co. displaced Dell as the world's largest computer maker.
H-P continues to enjoy a wide gap in worldwide PC market share; it held 19.1 percent to Dell's 15.7 percent in the first three months of 2008. But the turnaround efforts Michael Dell initiated after his return as chief executive in January 2007 appear to be gaining some traction.
"While I'm encouraged with our progress, we still have much work to do to restore our competitive position," Dell said on the conference call.
"But over time I am confident that our broad, long-term goals ... will drive growth in revenue, earnings, cash and ultimately shareholder value."
Dell's purchase is not unprecedented.
In May 2006, he spent $70 million to buy 2.9 million shares.
He also paid $72 million to acquire 4.3 million shares in the weeks after the Sept. 11, 2001, terrorist attacks.
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