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Dell Technologies

Dell Is Reportedly Reconsidering an IPO Following Hedge Fund Pushback

By
Don Reisinger
Don Reisinger
By
Don Reisinger
Don Reisinger
September 24, 2018, 9:23 AM ET

Dell Technologies might be reconsidering a move that would take the company public.

The company’s executives are debating whether to hold an initial public offering (IPO) and go public after deciding against the move earlier this year, Reuters is reporting, citing people who claim to have knowledge of its plans. Some of Dell’s executives reportedly believe that the company’s improving financial picture, coupled with some pushback from hedge fund managers over its “tracking stock” maneuver, create an IPO opportunity.

Dell was considering going public earlier this year but backed off the idea over concerns that Wall Street wouldn’t take kindly to its massive debt, according to Reuters. Instead, Dell decided to pursue a $21.7 billion deal that would see it acquire tracking stock held by hedge funds, including activist investor Carl Icahn. Tracking stock is a specific type of share that centers on a single company unit rather than the entire business. Dell’s tracking stock is specific to its 81% stake in VMWare (VMW).

Hedge fund managers, including Icahn, have bristled at Dell’s buyback, ostensibly believing there’s more value to be gleaned from the company.

If Dell goes public, those shareholders would be forced to sell all of their tracking stock, according to Reuters. And Dell is reportedly looking to work with investment banks to determine how an IPO might ultimately affect both its operation and those shareholders.

For its part, Dell hasn’t commented publicly on an IPO and declined Fortune‘s request for comment on the Reuters report.

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By Don Reisinger
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