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Talking stocks, trading, and investing in general - Page 539

post #8071 of 11182
Quote:
Originally Posted by Piobaire View Post

So basically Dell is going/has went from the, "Dood, you're getting a Dell!" company to enterprise solutions, servers, encryption, etc?

It has been that way for awhile actually.
Quote:
Originally Posted by chogall View Post

Why? It's genius move for him personally.

Financially, Dell doesn't need to go under public investor scrutiny, can lever as much as he possibly can while interest rates are still low and EMC business cashflow is very stable.

Structurally, he can consolidate shitload of manufacturing and sales and marketing costs while gaining VMWare. Dell already acquired a lot of enterprise networking/computing firms including some security companies.

Anyone has a guess of their lever? 4x?

I'm too close to the deal to comment, but I will say that even from a multiplier perspective it seems high. They have a NI of $2.7B which has been declining. If this was a startup, I could see it, but for a mature, slowly declining company, a 25x NI multiplier seems high.
post #8072 of 11182
Quote:
Originally Posted by Piobaire View Post

So basically Dell is going/has went from the, "Dood, you're getting a Dell!" company to enterprise solutions, servers, encryption, etc?

 

Actually, they are already an enterprise computing/networking company before the EMC acquisition.  Dell merely added the storage portions and VMWare (that runs on a lot of their servers) and Nicira (that's supposedly the future of networking).

 

Sorta like Oracle buying Sun Micro, for both Sun hardware (that Oracle software mostly runs on) with the important Java and MySQL.

post #8073 of 11182
So "has went" then? Thanks guys..I don't keep up on these things much.
post #8074 of 11182
Apparently Dell will need to pay to the tune of $2.5B per YEAR in interest on the debt they'll incur for this deal.

Does anyone know their cash flow scenario? That seems crushingly burdensome.
post #8075 of 11182
Quote:
Originally Posted by brokencycle View Post

It has been that way for awhile actually.
I'm too close to the deal to comment, but I will say that even from a multiplier perspective it seems high. They have a NI of $2.7B which has been declining. If this was a startup, I could see it, but for a mature, slowly declining company, a 25x NI multiplier seems high.

Use operating income of 4B then it's 15x, EBITDA then probably lower. Add lever up Dell even more using sales spike from WinXP EoL last year. Shove it down to yield hungary SWF and pensions funds.
post #8076 of 11182

@GreenFrog the combined entity will incur the debt.  Dell alone doesn't warrant that much debt, obviously.  

 

Some misconceptions about private equity/buyouts in this thread, it is essentially EMC incurring the incremental debt. 

post #8077 of 11182
Quote:
Originally Posted by GreenFrog View Post

Apparently Dell will need to pay to the tune of $2.5B per YEAR in interest on the debt they'll incur for this deal.

Does anyone know their cash flow scenario? That seems crushingly burdensome.

EMC makes enough to cover that number pre tax.
post #8078 of 11182
Quote:
Originally Posted by chogall View Post

Actually, they are already an enterprise computing/networking company before the EMC acquisition.  Dell merely added the storage portions and VMWare (that runs on a lot of their servers) and Nicira (that's supposedly the future of networking).

Sorta like Oracle buying Sun Micro, for both Sun hardware (that Oracle software mostly runs on) with the important Java and MySQL.

Quote:
Originally Posted by Piobaire View Post

So "has went" then? Thanks guys..I don't keep up on these things much.

Dell already had enterprise storage too before the acquisition. They've been buying up enterprise companies left and right for the last few years.
Quote:
Originally Posted by GreenFrog View Post

Apparently Dell will need to pay to the tune of $2.5B per YEAR in interest on the debt they'll incur for this deal.

Does anyone know their cash flow scenario? That seems crushingly burdensome.

Its not.
post #8079 of 11182
Quote:
Originally Posted by concealed View Post

@GreenFrog
 the combined entity will incur the debt.  Dell alone doesn't warrant that much debt, obviously.  

Some misconceptions about private equity/buyouts in this thread, it is essentially EMC incurring the incremental debt. 

Thanks for the clarification. I don't know jack shit about this stuff. shog[1].gif
post #8080 of 11182
ended green today icon_gu_b_slayer[1].gif

post #8081 of 11182
Lol, I am like 14 times better than GF
post #8082 of 11182
Or half as good with 28 times his $$.
post #8083 of 11182
You can calculate the principal amount otc is playing with based on the numbers he provided. devil.gif

TBH, I expected a higher # given otc's sleeper baller status.
post #8084 of 11182
Quote:
Originally Posted by GreenFrog View Post

You can calculate the principal amount otc is playing with based on the numbers he provided. devil.gif

TBH, I expected a higher # given otc's sleeper baller status.

You're assuming he only has one account.
post #8085 of 11182
Quote:
Originally Posted by Piobaire View Post

You're assuming he only has one account.

That's because GF is a small-timer.
Quote:
Originally Posted by otc View Post

Lol, I am like 14 times better than GF

Yes, that's what makes you 14 times better than GF. rolleyes.gif
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