Computer manufacturer Dell Technologies is back on the New York Stock Exchange this week, almost six years after one of the biggest buybacks in recent memory, putting a value of $34 billion on the company.
While Dell was a huge innovator in the desktop PC space in the early 2000s, it missed the boat as the market shifted away from desktops and grew to include tablets, game consoles, all-in-one systems, and other kinds of PC hardware. Michael Dell, founder and CEO of the company, spent $24 billion to buy the company's shares back in 2013. Dell said in a memo to employees at the time that "Dell's transformation is well under way, but we recognize it will still take more time, investment and patience." Dell was looking for "partners who will provide long-term support to help Dell innovate and accelerate the company's transformation strategy."
Michael Dell; source: Dell
In other words, typical shareholders aren't very patient, since they're bringing money in hopes of seeing their investments grow, rather than waiting for the greater company to do so. This began the process of Dell moving away from being a PC maker and more of a one-stop shop for corporations, offering complete IT solutions in addition to the previous focus on custom-configured PCs, which included a buyout of data-storage company EMC for $67 billion.
Right now, Dell is the third-biggest PC maker behind HP and Lenovo, according to research firm IDC, which puts Dell's market share around 18% and recently surpassed Hewlett Packard as the top server manufacturer.
Dell's reentry into the stock market took a non-typical route. Instead of going the standard IPO (initial public offering), the company bought back shares of VMWare's tracking stock, in which Dell already held an 81% stake. Tracking stocks are meant to separate the "high growth" part of a company from a part undergoing losses (such as during Dell's above transition), allowing the company to retain control of the business function while giving investors the opportunity to put their money into specific areas of the company. The VMWare buyout cost $23.9 billion and Reuters notes that this bypassed a lot of questions investors would've asked about the company's $50 billion pile of debt.
The company's shares are now trading under the DELL symbol on the NYSE, and opened at $46 on Friday morning.