PC David and Goliath

By | 2017-07-17T16:47:00+00:00 July 7th, 2017|Global Market Update|

Remember Compaq? Photo: Tiziano Garuti. Source: Wikipedia The PC maker was founded in 1982. It went from start-up to $1 billion in sales in only five years. It tripled that number in four more years, becoming the third-largest PC-maker – a leading producer of a revolutionary product. Compaq made a “luggable” computer – a PC that weighed 25 pounds or so. You could “lug” it from place to place, unlike desktops, which needed a lot more time to set up. It was one of [...]

Dude, You’re Getting … Junk?

By | 2013-11-08T11:58:48+00:00 November 8th, 2013|Global Market Update|

What’s happening with Dell? Last week Dell concluded its leveraged buy-out. The company issued $20 billion in debt and bought back all its outstanding shares. The $13 billion or so in existing Dell debt was downgraded to junk-status, jumping about 3% in yield and falling in price. So you could say that Michael Dell extracted around $1.5 billion in value from existing debtholders to help finance the LBO. But even thought the bonds are now B-rated, Dell is still a going concern, with a [...]