Speculation concerning Dell in buyout talks

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by HEATHER KOVAR / KVUE News and photojournalist DAVID GARDNER

Bio | Email | Follow: @HeatherK_KVUE

kvue.com

Posted on January 14, 2013 at 7:11 PM

Updated Monday, Jan 14 at 7:21 PM

ROUND ROCK -- Shares of Dell stock soared Monday after reports broke that the world's number three PC maker is in talks to go private.

The Round Rock-based company lost almost a third of it's value last year.

Dell isn't commenting on whether buyout talks are true, but economists say any change or shift in the company could impact Central Texas.

Bloomberg Financial News reports Dell is discussing going private with at least two firms.

Click here to read more about Bloomberg's reports on the buyout discussions.

Sources declined to be identified because they say talks are private.

One source was reported saying discussions are preliminary, and could fall apart because the firms may not be able to line up the needed financing or be able to resolve how to exit the investment in the future.

Dell spokesperson Jess Blackburn refused to discuss the report over the phone, only saying, "we do not comment on rumor and speculation."

As soon as the story broke, speculation surged online. On Twitter, various news organizations quoted the Bloomberg story. Trading was temporarily halted on the news. And because of the buyout banter, shares of Dell soared to a near eight-month high.

"We'll see what happens the rest of the week as stock owners decide what to do with their investment," said Economist Amy Holloway, president of Avalanche Consulting in Austin.

Holloway said any change at Dell would have a regional impact, and that " if Dell were to be bought out, it would effect jobs in Austin."

Holloway says its too early to discuss a long-term impact, but " it (the buyout) could lead to job losses, it could also lead to a shift in the types of jobs we have here in Austin."

Holloway said the buyout could end up improving the health of the company which could ultimately benefit Austin.

CEO Michael Dell currently owns just more than 15 percent of the company. Dell founded the company in 1984 in his University of Texas dorm room with $1,000.

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