Technology History | 11 Wall Street — Dell Came Back to the Market Without an IPO

Dell's ticker reappeared on the New York Stock Exchange on 28 December 2018, and no shares were sold to raise money that day.

The listing came out of an exchange, not an offering.

The mechanism was a tracking stock. When Dell bought EMC, each EMC share was converted into $24.05 in cash plus 0.11146 shares of a new Class V stock, listed here as DVMT from 7 September 2016 and designed to track a portion of the VMware stake that came with EMC rather than the business as a whole.

That is a strange instrument to own, since a holder carried exposure to a company whose shares they did not own and whose board they could not vote for.

In the Class V transaction, approved by stockholders at a special meeting on 11 December 2018, Dell Technologies bought the instrument back: $14.0 billion in cash plus 149,387,617 newly issued Class C shares, with each Class V share converting to either $120 in cash, subject to that cash cap, or 1.8066 Class C shares.

The exchange ratio was struck off the tracker's own volume-weighted average price over seventeen trading days to 21 December 2018, which was $104.87.

Class C began trading on a when-issued basis on 26 December and regular-way on 28 December, under the symbol DELL.

The careful version of this is worth keeping straight, because the shorthand gets it wrong.

Dell was not absent from this building between 2013 and 2018. Part of it, in the form of the tracker, had been listed here since September 2016.

What changed on 28 December was that public holders owned stock in the entire company again, and the tracking-stock feature of the capital structure was terminated.

The company that left the Nasdaq in October 2013 at about $24.9 billion came back carrying the borrowing behind an EMC purchase that Dell's own accounts put at roughly $64 billion of consideration, and that the press reported at $67 billion.

Simplifying the share structure was a condition of managing that debt, not a celebration.

The photograph is what a visitor gets: the columns and the carved pediment, seen from Broad Street.

Photo: Donatingpictures, CC BY-SA 4.0, via Wikimedia Commons.