Michael Dell’s Show of Confidence in Dell, Inc. Boosts Share Price
In a decisive demonstration of his confidence in the company, Michael Dell, founder and CEO of Dell, Inc., bought nearly $100 million in Dell shares. From Friday 27 June through to Tuesday 2 July, Dell purchased 4.5 million shares at an average of $22.07 per share. This is the first time in the past five years that a purchase of this size has been made by an individual insider at any company. This recent purchase brought his direct holdings to 22 million shares, securing Michael Dell’s position as Dell Inc.’s largest shareholder.
The news of this purchase bolstered confidence in the company, resulting in a surge in Dell shares which rose by 2.3 percent on Wednesday, closing at $22.70 despite the fact that the majority of technology stock slumped. Analysts agree that investors like the fact that Dell has so much confidence in his company’s capabilities and are expecting Dell shares to rise to at least $26 during the current quarter.
Dell’s substantial investment comes in the midst of the company’s efforts to deal with problems which saw it lose the number one position in the computer market to opposition Hewlett Packard Inc. Michael Dell has made great strides to turn the situation around since he rejoined the company as CEO in January 2007.
Michael Dell showed his talent for entrepreneurship early in life when he started a computer company in his room in Dobie Center while he was a student at the University of Texas. His company, PC’s Limited, was so successful that, with the backing of his grandparents, at the age of 19 Dell dropped out of university to run his burgeoning company. PC’s Limited later became Dell Computer Corporation, and ultimately Dell, Inc. Although it was not all plain sailing and there were numerous obstacles to overcome, by 2004 Dell was the most profitable PC manufacturer in the world showing a profit of $3 billion. With the company’s product line incorporating more than just computers, in 2003 the shareholders voted to rename the company Dell, Inc.
In March 2004, Michael Dell stepped down as CEO of Dell, Inc. while remaining as chairman of the board. In January 2007 he resumed his position as CEO following the resignation of Kevin Rollins. Michael Dell has been honored as an outstanding businessman by a number of well respected magazines and associations and certainly has the know-how to take Dell, Inc. into a bright future.