Like a handful of computer manufacturers lately, Dell hasn’t been doing so hot, and it’s rumored that the company is considering going private and taking its name off the public stock market. Anonymous sources have told Bloomberg that “several large banks have already been contacted about financing an offer to take Dell private.”
Trading was halted on the company for a short while, but shares jumped 15% when trading resumed. Dell has declined to comment on any rumors or speculation, but it’s said that the company is in talks to go private with at least two private equity firms. However, the deal could easily fall apart if the firms can’t line up the needed financing, or can’t figure out how to exit the investment in the future if need be.
Dell was once a giant in the personal computer market, but the company has struggled in recent years, losing over a third of its value just last year. In the most recent financial report, Dell’s revenue was down 7% year-over-year, while profits were down 34%. However, the company currently has a little over $5 billion in cash to help it float through the decline.
Since CEO Michael Dell owns a large percentage of shares (15.7%, to be exact), Bloomberg‘s sources say that it’s easier for financial firms to work out the deal. If Dell were to actually go private, that would mean that all of the publicly traded shares would be bought up by a private firm, and being private means looser regulatory issues to deal with, which could be an opportunity for shareholders to cash out.