Dell Shares Can't Reach Bottom Fast Enough

[Vincent Ferrari]

<div class='os_post_top_link'><a href='http://finance.yahoo.com/news/Dell-shares-slide-after-apf-14268407.html' target='_blank'>http://finance.yahoo.com/news/Dell-...f-14268407.html</a><br /><br /></div><p><em>"Shares of computer maker Dell Inc. retreated Thursday after a JPMorgan analyst downgraded the stock, citing the company's high exposure to a withering PC market. Unlike rivals Apple Inc. with smart phones, and Hewlett-Packard Co. with printers, Round Rock, Texas-based Dell hasn't significantly diversified into other markets. That is likely to "make for a bumpy ride given our view on PCs," JP Morgan analyst Mark Moskowitz told investors in a note, downgrading Dell to "Underweight" from "Neutral.""</em></p><p><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/at/auto/1233926669.usr18053.jpg" style="border: 1px solid #d2d2bb;" /></p><p>Remember when Michael Dell said the quote I pasted over Steve Jobs' head?&nbsp; I sure do.&nbsp; It was in 1997, and was during one of the darkest phases of Apple's history.&nbsp; The company was floundering after utterly incompetent leadership left the company in shambles, and Apple had just bought out a small hardware company with some innovative ideas called NeXT.&nbsp; That company was headed by none other than Steve Jobs, who returned to Apple's top seat and turned the company from an also-ran joke into a compulsive innovator.</p><p>Today, no one is talking about Apple selling the company and returning money to shareholders in Cupertino.&nbsp; In Round Rock, however, I bet they're wondering if Michael Dell will put some of that bravado into the pockets of <strong>his</strong> shareholders.</p>

[jdmichal]

Flamebait? Com'on Vincent. I had higher expectations for your promise to do this rarely (http://www.applethoughts.com/news/show/91391/zune-price-cuts-desperation.html).

[Vincent Ferrari]

Flamebait? Com'on Vincent. I had higher expectations for your promise to do this rarely (http://www.applethoughts.com/news/show/91391/zune-price-cuts-desperation.html).

How is this flamebait?

In 1997, when Apple was at it's worst, Michael Dell puffed out his chest and said he'd give the money back to shareholders.

12 years later, Dell is in a situation that's just as bad and I'm not supposed to even mention it?

Michael Dell's statement stands as one of the most important moments every Apple fan remembers in the long-running Mac vs. PC wars, and on the day that their share prices started plummeting and analysts started saying stay away, I'd be remiss in not mentioning that the company that was once telling everyone else how crappy they were doing is now doing just as crappy.

The irony is too good not to post.

[jdmichal]

How is this flamebait? ... Michael Dell's statement stands as one of the most important moments every Apple fan remembers in the long-running Mac vs. PC wars... The irony is too good not to post.

I like the ironic part where you answer your own question. It's a long-standing part of the "Mac vs. PC [flame]wars", and you can't figure out how bring it up is flamebait?

Secondly, when this was said, Apple was literally being kept alive solely by capital injections from another -- let's leave it unnamed (http://www.wired.com/gadgets/mac/news/2004/01/61801) -- company who needed the "competition" for anti-trust reasons. Apple was literally a dead platform; almost every other major developer except this one had stopped releasing for Apple, including Adobe and Lotus.

With this context in mind, Dell's comments very much make sense from a free-market capitalist point of view; Apple was not able to support itself and was a very dead system, and in a free market should have either been bought out or liquidated. Which is exactly what Dell suggested. (Instead, the capital injections kept them alive enough to purchase NeXT and recreate their entire product line.)

Dell is no where near that point. Their stock is down roughly 75% from a peak around January 2005, but Apple itself is down 50% from their peak in January 2008. And instead of pointing out specifics, I'll simply recommend that you acquaint yourself with their actual numbers (http://finance.google.com/finance?fstype=ii&q=NASDAQ:DELL). While not spectacular, they are certainly healthy numbers, and are no where close to the level of Apple's sickness during the time period in question.

[Tim Williamson]

I think Vincent just wanted another excuse to add text to a picture he's used a hundred million times before on the site. ;)

[Jason Dunn]

Flamebait? Com'on Vincent. I had higher expectations for your promise to do this rarely (http://www.applethoughts.com/news/show/91391/zune-price-cuts-desperation.html).

Nah, it's called editorial. It's what makes running a Web site fun. It's boring to report on news all the time - sometimes you have to flex your opinion muscles. :)