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With just one more day before the date of the Dell buyout vote—well, one more day before the revised date of the Dell buyout vote—confirmed crazy billionaire Carl Icahn issued an open letter to the Dell Special Committee. In short, Icahn is annoyed that the vote was already delayed once, and wants to make it perfectly, entirely, and unquestionably clear that he and Southeastern Asset Management are not in favor of company founder Michael Dell buying out the shareholders’ stock and making Dell private once again.

It seems clear from the letter that, despite Dell’s recent reports of underperformance, Icahn is of the opinion that the company is more valuable as a publicly traded entity than one that’s private. Overall, Icahn thinks that Dell’s financial outlook isn’t nearly as bad as it’s been purported, its fortunes will turn around shortly, and its forthcoming successes will ultimately line the pockets of shareholders to a far greater degree than a buyout could. Here’s an illustrative selection from Icahn’s letter (underline his):

“In seeking to obtain stockholder votes, Dell has embarked on a pattern of scare tactics, disclosing increasingly negative results and prospects.  But we believe that a number of operational decisions at Dell have created much of this bad news.  And why does the Dell Board forget to mention the $13 billion spent on enterprise software that is just beginning to show excellent results?  In our opinion and the opinion of a number of experts we have spoken to, Dell’s enterprise software and cloud computing have enormous potential.  Why can’t all stockholders benefit from this?”

Sounds relatively reasonable, right? Sure. But then Icahn goes and reveals himself to be a little nuts in this case. How’s that? By using ALL CAPS, the surest sign of Internet-insanity:

“WE CALL ON THE DELL BOARD TO KEEP ITS PROMISE AND LET THE VOTE BE FINALLY DECIDED ON JULY 24.  We think that – after six months – the time for soliciting is over.  It’s time to vote.  Do not move election day again.  This is not a banana republic.

WHEN WILL WE HAVE AN ANNUAL MEETING?

WE ALSO CALL ON THE DELL BOARD TO MOVE QUICKLY TO HOLD THE DELL ANNUAL MEETING WHEN STOCKHOLDERS WILL BE ENTITLED TO ELECT OUR SLATE OF DIRECTORS IF THE MICHAEL DELL/SILVER LAKE TRANSACTION IS DEFEATED.

Oh, I forgot to mention. He goes and uses bold and underline as well.

Obviously I’m being facetious when I call Icahn out on his font-usage as it pertains to Internet-etiquette, but it points to a larger problem with the investor’s role in the buyout. It’s no secret that the computer business is hurting right now, and Dell hasn’t been doing too hot for a while. In fact, the company on which Dell’s fortunes ultimately lie, Microsoft, has had a sharp financial fall recently as well, as illustrated by this Slate post, not to mention our discussion of the $900 million the company had to eat when it didn’t move enough Surface Tablets. If Microsoft’s Windows 8 fails to find an audience, no one will buy Dell’s Windows 8-optimized machines. And if that happens, well, what kind of dividends does Icahn expect to earn from holding onto his continuously falling Dell stock?

Add to that the fact that an independent advisory firm has already endorsed Michael Dell’s plan to buy the company and go private, and it leaves me wondering what Icahn’s longerm goals might be. A piece in the New York Times posits that Icahn, Southeastern Asset Management, and T. Rowe Price can block the buyout plan being successfully approved in the vote, and that the three stockholders have already publicly acknowledged their opposition to the plan. And if that’s the case, then it also makes me wonder what Icahn hopes to achieve by publishing the open letter, other than simply putting pressure on the board to actually hold the vote instead of delaying it.

Regardless of his intentions, hopefully we’ll find out what effect his letter—and his other maneuvers thus far—will reap if the vote actually takes place tomorrow. Stay tuned.


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