Immediate Trade

16B Dollar Bet

Cover Image for 16B Dollar Bet
Greg P
Greg P
Posted underArtificial IntelligenceCloudDELLEMCMichael DellPrivate Companiesprivate equitySilver Lake PartnersVMWare

Michael Dell’s decision to take Dell private despite significant challenges is discussed. Facing a declining consumer PC business and a plummeting stock price, Dell shifted focus to software and services, investing $10 billion and growing it to $21 billion within five years. However, the market did not share the same optimism, leading to a guttered stock price at just $12. With no other viable options, Dell took the company private in 2013, borrowing $19.4 billion initially and later another $50 billion, bringing his total debt to $70 billion. This risky move made history as the largest technology leverage buyout of all time. After turning around Dell and taking it public again in late 2018, Dell’s net worth is now $86.6 billion. Michael also engaged in a bidding war with corporate raider Carl Icahn to take Dell private and save the consumer PC business by switching to a build-to-order approach. In 2015, Michael acquired EMC for $67 billion, borrowing $48.6 billion to make the acquisition. The deal proved valuable as both Dell and EMC regained profitability, and VMware’s virtualization software technology became invaluable in the cloud market. When Broadcom acquired VMware for $69 billion a few months later, Michael Dell and his creditor, Silver Lake, netted an estimated $70 billion.


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