Sizemore on CNBC: “Dell Wants to be IBM”

February 6, 2013
8

Charles Sizemore appeared on CNBC last night to discuss the Dell (Nasdaq:$DELL) leveraged buyout.

The $24.4 billion proposal to privatize U.S. technology giant Dell is part of founder Michael Dell’s efforts to transform the company into a ‘mini IBM’, said analysts, as the world’s third largest personal computer (PC) maker struggles to protect its market share against competitors.

If the deal is approved, tech experts said this will pose a threat to key rival Hewlett Packard, which has also been undergoing a similar strategy shift towards a greater focus on the higher-margin enterprise services space.

“What they [Dell] want to be is IBM – they are not there yet – but they want to focus on enterprise services and solutions – they want to run the IT departments of large and small corporations and government agencies, that’s the direction they want to go in,” Charles Sizemore, chief investment officer at Sizemore Capital Management told CNBC on Wednesday.

To read the full article, please follow this link.

SUBSCRIBE to Sizemore Insights via e-mail today.

8 Responses
  2. Mjaffe

    I beg to differ… $HPQ discovered that once it made cuts to R&D it started to decline. R&D at $DELL is almost non-existent and as such it will never even come close to the stature of $IBM. Packaging alone will not make it.

    1. Charles Lewis Sizemore, CFA

      Mjaffe,

      I said Dell WANTS to be IBM.  I didn’t say they would get there…  That said, I do think there is room at the enterprise table and that Dell can carve out a niche for itself. It already has.  But yes, you are right.  IBM did not become IBM over night, and Dell has its work cut out for it.  

      But between DELL and HPQ, I would bet on a leaner company led by an energized Michael Dell over a lumbering behemoth like HPQ.  

      CLS