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Carl Icahn Loses Dell Inc. (DELL), Finds a Global Soapbox

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Although we don’t believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes — just in case they’re material to our investing thesis.

The notion of a U.S.-led military strike against Syria, which once seemed imminent, now looks anything but, with President Obama requesting the assent of a very lukewarm Congress. Add to that the market’s acceptance of the idea that the Fed will decide next week to begin scaling back its bond purchase program, which now appears to be the consensus. Finally, throw in some positive economic data out of China and some domestic merger announcements and you have all the ingredients for a nice pop in stocks to start off the second week of September.

The S&P 500 rose 1%, while the narrower, price-weighted Dow Jones Industrial Average was up 0.9%. However, it was the Nasdaq that stole the spotlight today, with a 1.3% increase, to reach its highest level since September 2000. (It’s important to point out that this statement holds in nominal terms only — once you adjust for inflation, today’s Nasdaq closing price remains a full 26% below its level on Sept. 28., 2000.)

With those advances in stocks, it’s no wonder the CBOE Volatility Index fell 1.4% today, to close at 15.63. The VIX, Wall Street’s “fear index,” is calculated from S&P 500 option prices and reflects investor expectations for stock market volatility over the coming 30 days.


Dell: It’s all over, folks

Activist investor Carl Icahn, Dell Inc. (NASDAQ:DELL)‘s second-largest shareholder with an 8.9% stake, has announced he will no longer try to block the hardware and services company’s acquisition by its founder, Michael Dell, and private equity firm Silver Lake Partners. A new shareholder vote (a first one was cancelled by the board) is set for this Thursday. Dell Inc. (NASDAQ:DELL) shares closed at $13.84 today, a $0.09 premium to Michael Dell’s “best, final offer” of $13.75 per share. The deal is now effectively a certainty.

Still, the battle for Dell Inc. (NASDAQ:DELL) has been a learning experience for Icahn, who discovered the power of Twitter during the process — his very first tweet concerned Dell. In his letter to Dell shareholders today, he encourages investors to follow him on Twitter @Carl_C_Icahn. “The reason I’m excited by Twitter is I believe, finally, there is a platform so that shareholders will understand how really dysfunctional our corporate governance system is,” Icahn told The Wall Street Journal in an interview.

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