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Taking Dell private a big gamble

Dell Chairman and CEO Michael Dell. (Getty)

Dell Chairman and CEO Michael Dell. (Getty) Credit: Dell Chairman and CEO Michael Dell. (Getty)

Back when I was a teenager in the 1990s, the cool computer to get was a Dell, and the company rode the back of the Internet boom to glory as non-nerds started buying computers.

In fact, during that heady decade, Dell's stock price rose an astounding 85,000%.

Since then, the death of the dot-com bubble, the resurrection of Apple, and a shift in spending toward mobile devices seemingly put Dell on death's door.

This week, we learned that Dell is coming to the end of its life as a public company as founder Michael Dell, along with a group of investors, is offering to take the company private at a price of $13.65 a share. That's a whopping 77% discount from its all-time high hit back in March of 2000.

Some critics are arguing that Dell and his investors are about to take the company for a bargain-basement price that was only made possible by the company's poor management decisions over the past few years.

It's actually all a bit silly.

If you've owned Dell stock for years and didn't like how things were going, 1) you should have been out a long time ago, and 2) the stock's up over 30% year-to-date, something that would not have happened without this acquisition.

And maybe Dell and his crew are getting the company at a cheap price, but they won't have an easy go of it. The Microsoft Windows 8 PC cycle is getting off to a very slow start, and Dell doesn't have much going for it in the two electronics categories that matter - smartphones and tablets.

Maybe they'll strike it rich, but there's an equal chance they'll strike out.

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