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Technology Stocks : Dell Technologies Inc.
DELL 127.22+3.8%3:59 PM EST
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To: SecularBull who wrote (55541)7/31/1998 4:14:00 PM
From: Jim Patterson  Read Replies (4) of 176387
 
LoD,
From the quarterly report, and this is from memory,
They raised $554 Million.
They bought back $324 Million in stock.

The debt was done so they could expand.
Either way you look at it,
If they had not bought the stock back they would have only needed half of the Debt offering.
But, If they had not bought stock back for the last 2 quarters, then they would not have needed any of the debt to expand.

So, The way I see it,
Dell issued the Debt because they don't generate enough cash flow to buy back stock and expand. Mikey wants his cake and to eat it too.
Now they have to pay interest on stock that they bought back.
I don't view this as productive use of capital.

Let's draw this to a close.
(Especially since I have the last word at this point:)
We disagree on how to view the situation of DELL and their use of their debt offering.
All kinds of wonderful comments can be made on how it will help them expand and what a great mgt. move it was. The bulls view.

I think it was a terrible move by an arrogant mgt. team that thinks hard times will never hit their company.
When hard times hit, be it in 1998 or 2008, this debt offering reduces their resources for the future needs.
A conservative view.

Jim
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