Dell is in "buyout talks" with private investors, according to a report published by Bloomberg Monday that sent the struggling computer maker's shares surging.
Citing unnamed sources, the report suggested that Dell was in "preliminary" discussions with "at least two" private equity firms. It was the asserted that going private could help Dell "accelerate efforts to revive growth and cope with competition without quarter-by-quarter scrutiny from public shareholders."
A separate Bloomberg report noted that Dell CEO Michael Dell told analysts and investors back in 2010 that he had considered taking the company private. Dell did not immediately respond to a request for comment.
Dell's PC business has been in decline in recent quarters, putting pressure on the company's stock price. Though Dell has been growing its enterprise IT and services business, it isn't enough to offset the company's struggles in other areas.
"Going private could take away the pressure and get Dell focused on more long-term goals. But the downside is that he cost of capital is more expensive than when you're public and you miss out on all the free promotion of being a public company," explained Patrick Moorhead of Moor Insights & Strategy.
Over the last several years, Dell's acquisitions of such companies as EqualLogic, Perot Systems, Force10, and Quest have put in a position to compete with the likes of IBM, Hewlett-Packard, and Cisco for big enterprise IT contracts tying in a portfolio of servers, storage and networking equipment, software, and services.
There have been a few examples of large publicly held tech firms going private in recent years, particularly during the so-called "mega-buyout" period of the mid-2000s, but none involving a company as large as Dell, the world's third-largest computer manufacturer, Moorhead said.