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Dell Makes Deal To Become Private Company

STEVE INSKEEP, HOST:

And let's talk about another company in transition. Dell is taking itself private in a deal worth more than $24 billion. So it's going off the stock market. The stock's being bought up by people including the founder, Michael Dell. The question for analysts is whether this will leave the company in better position to compete.

Here's NPR's Steve Henn.

STEVE HENN, BYLINE: For Michael Dell to take the company he founded almost 30 years ago private - the company will have to borrow something in the neighborhood of $15 billion.

And Horace Dediu, an industry analyst, says over time that big, new, debt will place a drain on Dell's cash.

HORACE DEDIU: The idea that Dell would somehow retool for growth under private ownership doesn't stand the harsh light of reality.

HENN: He's believes taking Dell private might maximize the return to big shareholders as the company declines, but it won't spark innovation and it will drain the company's resources. The thing is, right now at least, Dell is still profitable.

Last year it earned more than $3.5 billion, but its market share is slipping. It's been left behind as personal computing has gone mobile.

Bob O'Donnell follows the industry at IDC.

BOB O'DONNELL: We do see some of the tasks for which you needed a PC now being done on these other devices.

HENN: So O'Donnell says people are buying PCs less frequently, and Dell still hasn't introduce a successful tablet or a smartphone. And the company's prospects in that space seem bleak.

Steve Henn, NPR News, Silicon Valley. Transcript provided by NPR, Copyright NPR.

Steve Henn is NPR's technology correspondent based in Menlo Park, California, who is currently on assignment with Planet Money. An award winning journalist, he now covers the intersection of technology and modern life - exploring how digital innovations are changing the way we interact with people we love, the institutions we depend on and the world around us. In 2012 he came frighteningly close to crashing one of the first Tesla sedans ever made. He has taken a ride in a self-driving car, and flown a drone around Stanford's campus with a legal expert on privacy and robotics.
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