Dell Inc. (DELL) Q4 Results to Impact LBO Plan?

According to market research firm Gartner, global personal computer shipments dropped 4.9% in the fourth quarter of 2012 as more smartphones and tablets replace traditional computers for many tasks. However, the decline was sharper at Dell — 21%.  HPQ’s shipments experienced a marginal drop of 0.5%, while supercomputer maker Cray, which does not reveal number of shipments, witnessed a 2.6% drop in Q3 revenues. However, the decline was sharper for Dell Inc. (NASDAQ:DELL), including an 11% drop in revenues.

What has changed in recent months? Now, there is a buyer at higher rates, which has instilled confidence in smaller investors. Michael Dell’s enthusiasm for taking the company private is understandable but Silver Lake’s involvement is noteworthy as private equity companies usually are not known for holding their investments for long. It is not surprising if Michael Dell harbors plans of eventually buying out its private equity partner a couple of years down the line.

Dell’s strong footing in Enterprise business is a shot in the arm, but a constant stream of newer players means existing companies cannot charge a premium. With more and more retail buyers shifting to tablets and smartphones, and given Dell’s absence in these segments, it is difficult to see a long term upside for the business, even if held privately, away from public scrutiny.

The article Dell Q4 Results to Impact LBO Plan? originally appeared on Fool.com and is written by Jacob Wolinsky.

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