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Dell Technologies (NYSE: DELL) returns back as a public listed company

On Friday, Dell Technologies Class C common stock started trading on a regular basis in NYSE under the symbol DELL without taking the IPO route. The computer maker announced that it has completed the Class V transaction following the shareholders’ approval on December 11. The stock opened at $46 on Friday’s regular trading session.

Dell Technologies paid $14 billion in cash and issued 149,387,617 shares of its Class C common stock in connection with the Class V transaction. The company’s Class V common stock (NYSE: DVMT) ceased trading prior to the opening of trading on December 28, 2018.

Dell, which became a private company in 2013, experienced a setback for when the activist investor Carl Icahn filed a lawsuit against the company two months back. He accused that Dell refused to provide information related to its proposed acquisition of VMWare tracking stock. Icahn, who increased his stake in DVMT to 9.3%, later withdrew his lawsuit stating that he will not be able to win the proxy.

Related: Dell Technologies Q3 2019 earnings conference call transcript

Dell Technologies owns 81% of VMWare, which it acquired from Dell-EMC transaction in 2016. Dell was planning for a reverse merger with VMWare and several investors didn’t agree on this plan. In July, Dell reached an agreement with VMWare to buy it for $9 billion.

The Round Rock, Texas-based PC and software maker had been posting quarterly losses continuously while its rivals Cisco Systems (CSCO), Hewlett Packard Enterprise (HPE), Oracle (ORCL) and IBM (IBM) are profitable. For the third quarter of 2019, Dell reported a net loss of $895 million which widened from the year-earlier loss of $851 million. Revenue for the quarter increased 15% year-over-year to $22.5 billion. Within the past two years, the company has paid down approximately $14.4 billion in gross debt.

Shareholders clear decks for Dell to return to public markets

For FY19, Dell expects non-GAAP revenue to be in the range of $90.5 billion and $92 billion and non-GAAP net income to be between $4.9 billion and $5.3 billion. Investors will be looking for the company to report a profit in the new calendar year.

Meanwhile, shares of VMWare (VMW) were up about 2% on Friday’s regular trading session. JPMorgan analyst Paul Coster has set a price target of $60 for Dell stock, which closed Friday’s regular trading session at $45.41.

 

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