PoorRich, I think the split has to do with bringing in some cash... here is how I see it. DELL has been buying their stock back... a multimillion dollar buyback... can't remember the number, $70 or $80M. DELL has authorized an increase in the number of shares from 1B to 3B.
So, at some time DELL will have to announce very impressive earnings along with a split (for simplicity say 2:1)... a given will be an increased share price... and that is when DELL will offer some of the shares bought back earlier to the market... and bring in some cash... the only thing that I keep asking myself, well, it is to DELLs best interest to buy all the shares they want at the lowest possible price, and the question that comes to mind, was that the $98 - $99 seen last week or the $78 seen in June... I guess the question is, did DELL buyback all the shares they can with the money they have for that or not...? any info. on that...
DELL as a company is a well managed and run company, and I think that they have been focused on improving their direct sales model and have been doing a wonderful job over the years, to the extent that merely catching up is already a such tough job for competitors...
I think what makes DELL very volatile is the fact that many people who have money on DELL don't really know all the facts, they just went with the numbers to make money, and they are quick to the exit doors... here is what I will do... I am going to get out of my August $105 and $120 call options, and will go long with money I can forget about for a year or so...
Good luck to all.
Amein Alsuezi |
