Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hewlett-Packard Company (HPQ) Teases Dell Inc. (DELL) About Its New Private Life

Page 1 of 2

Not too long ago, Dell Inc. (NASDAQ:DELL) was teasing rival Hewlett-Packard Company (NYSE:HPQ)‘s  about its woes. Back in 2011 when HP was suffering from a major identity crisis, Michael Dell took to tweeting some zingers at the expense of his company’s larger competitor. HP’s contemplation of ditching the PC business was an opportunity for Dell to capitalize.

Hewlett-Packard Company (NYSE:HPQ)The tables have turned
With news today that Dell is officially hoping to go private in a $24.4 billion deal with Michael Dell and Silver Lake Partners that values the company at $13.65 per share, HP is now taking the opportunity to tease Dell. This comes after reports emerged last month that Dell was exploring the option.

HP has now issued a formal statement, the sole purpose of which is to goad its soon-to-be private rival:

Dell has a very tough road ahead. The company faces an extended period of uncertainty and transition that will not be good for its customers. And with a significant debt load, Dell’s ability to invest in new products and services will be extremely limited. Leveraged buyouts tend to leave existing customers and innovation at the curb. We believe Dell’s customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity.

Them be fightin’ words!

Let’s take this outside
Not only is HP calling out Dell for the leveraged nature of the deal, saying that Dell won’t be able to invest in its future, but also makes it very clear that it intends to win over its customer base. The two PC giants continue to duke it out amid stagnation in the broader market. IDC’s recent estimates show that the two are closer competitors domestically, while HP still has an advantage internationally and retains its No. 1 spot.

Vendor / Market 2012 Units 2012 Market Share
HP / Worldwide 58.1 million 16.5%
Dell / Worldwide 38.7 million 11%
HP / U.S. 17.9 million 26.8%
Dell / U.S. 14.1 million 21.1%

Source: IDC.

At the same time, it’s not as if HP doesn’t have a hefty debt burden of its own — $21.8 billion in long-term debt at last count. The company raised $4.6 billion of debt as recently as September 2011 to help finance its purchase of Autonomy, which promptly evaporated just over a year later along with an additional $4.2 billion for a total impairment of $8.8 billion related to the scandalous acquisition.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!