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Dell going private

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2/5/13 9:55 AM
So it's announced this morning that Dell will go private, paying 13.65 per share to existing shareholders. What puzzles me is that its stock still trades at 13.39 as of right now. Is this the most obvious sure bet or am I missing something here?
2/5/13 9:55 AM
2/5/13 10:19 AM
I did something similar with Ancestry.com (ACOM). Bought at $31.49 after they announced a merger at $32.00. I think the risk is that the deal may not be approved, and even if it is it can take months for the deal to go through so your money is tied up during that time.
2/5/13 10:30 AM
Zulu is correct. The discount is essentially the risk that the merger is not approved or that it falls through some other way. If this were to happen, the stock would likely fall back to roughly the lower price it was trading at before the buyout talks became public.
2/5/13 10:54 AM
They're waiting 45 days to solicit competiting offers and based on the current stock price, the market doesn't feel other offers will come.

You're putting your money on hold for 45 days with the risk that the deal will fall through.
2/5/13 11:23 AM
well ill finally get rid of some Dell shares ive had for a long time.
2/5/13 11:31 AM
who in their right mind would buy Dell for 25bil?!
2/5/13 12:25 PM
Just because Dell has an offer for $13.65 does not mean that people will buy at $13.65. Since any money in Dell will not moved up because it's capped at $13.65, investors will try to sell their Dell shares so that they can put money where it's not capped. Only way Dell can trade higher than $13.65 is if another company is interested in buying Dell. But nobody wants to buy Dell since PC market is going downhills. Investing in a company like Qualcomm is a better investment than Dell.
2/5/13 12:45 PM
RiceBOX said:   

who in their right mind would buy Dell for 25bil?!

Michael Dell, Microsoft, and private equity. Then they'll flip it in 3 - 5 years for $50B and laugh all the way to the bank.
2/5/13 1:40 PM
Who is ready for Microsoft branded devices and ecosystem? Apple 2.0 anyone? mPhone, mPuter, mTop, mWindows, mOffice.....

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