Friday, June 11, 2010

Dell -- Does Michael Dell Have Credibility

Dell (DELL) announced a complicated legal liability that will destroy shareholder wealth. Michael Dell has cost the shareholder potentially some $100 million. Thanks a lot Mike Dell. The problems revolve over poor and inadequate disclosure.

What is surprising is the continued support of the Board of Director’s. Former Senator Sam Nunn who used to represent the state of Georgia reaffirmed the board’s support with this statement:

“The independent directors of the Board have affirmed that Michael Dell will continue to lead the company as its Chairman and CEO, and he continues to have our complete confidence and support,”

Senator Nunn is the presiding independent director supposedly looking out for the interests of shareholders.

No mention of any changes in governance or disclosure policy. So if someone costs you
$100 million shouldn’t you change something. Ross Perot sits on this board. How happy can he be? Usually he is not shy? Wonder if Mike and Ross are having a drink and sorting things out.

Oh by the way the next time Michael Dell says something to we believe him.

Disclosure: No position in any stocks mentioned in this post.