Will Microsoft Invest in Dell?

Rumors abound that Microsoft may invest some capital to help Dell become a privately-owned business. This would put an end to the 25 years of public trading that Dell has enjoyed.

A Change

There has also been speculation that Dell may be moving away from the customer end of the business and taking on other projects. The company felt a decline in the PC area of the business as more customers move away from desktops and laptop computers in favor of mobile devices.

In 2012, Dell noted a 12.6% drop in shipments for its computer products. At the same time, the company has ventured into other areas, including security, storage, and enterprise software. Many experts say that the company may do better to not have to report quarterly earnings during this change.  Companies often experience a drop in profit and revenue when they move into new territory.

Dell bought Quest Software last July. This is a company that develops software for security in the corporate world and enhances virtualization. Perot Systems was purchased back in 2009; it provides IT services to major enterprises.

Dell is working with Silver Lake Partners to find financing for this new venture. SilverLakePartners specializes in technology companies.

Dell shares have been rising with the news of moving to a private company. The company also has an attractive cash balance of $11 billion, which will make it appealing to investors in spite of the drop in sales for last year. Microsoft may be only one of several big name companies interested in investing with Dell.

While both Dell and Microsoft have remained quiet about the rumors, sites such as CNBC and Wall Street Journal have reported the information they say they have obtained from unnamed sources close to the situation.

If the announcement does become public, you have to wonder what other companies will be interested.

[Image via itechwik]