Dell Buy-out (or Snatch-out?)

The only lesson that transactions like the proposed buy-out of Dell shareholders orchestrated by it's CEO Michael Dell can give is that investing in equity is only for short-term speculators.
A banker once famously said that shareholders are stupid as they give their money and even want a dividend in return. A look at the metrics for Dell shares makes it clear that the buy-out is only designed to enrich the chosen few and leave the public shareholders holding the bag in the shape of a derisory premium. It will be interesting to see if the main institutional holders - aka fiduciaries or the common man - allow this transaction to happen. It should not happen at all as long as Michael Dell has not served a cooling off period of at least two years without any say in the company. The roster of institutions that have the final say on the deal reads like a Who is Who of US finance and one can only hope that they stop transactions that just take advantage of the public shareholder.
(5-Feb-2013)

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