Blackstones Comes to Their Senses: Drops Dell Bid

Well this is more evidence that Blackstone is one of the better money managers in the business.

The firm is withdrawing its offer, which valued Dell shares at about $25 billion because of "an unprecedented 14 percent market decline in PC volume in the first quarter of 2013, its steepest drop in history, and inconsistent with management's projections for modest industry growth," according to a letter sent to Dell. 

Earlier this month, technology research firm International Data Corporation said PC shipments in the U.S. fell fell 13.9% year-over-year to 76.3 million units in the first quarter, sharply worse than the 7.7% the firm had forecast.

Dell is a dying duck and paying $25 billion for a company that derives most of its sales from a product that might be totally commoditized in less than 5 years is setting that money on fire. I mean Dell will not be able to compete with low cost PCs from China and scramble for a market that is rapidly shrinking due to mobile. Some companies are taking 7 years to refresh their PCs (instead of 3 - 5) and might just refresh them to low cost Chromeboxes or tablets with docking stations, keyboards, and monitors.

I mean I was in Verizon the other day and the sales rep did his entire sale on a tablet with a little payment peripheral plugged into it. I can see many other sales and retail companies following this model and just forgetting about a PC all together. It just depends on how fast their business software turns into Android or IPhone apps. In any case Dell like HP will become the next Blackberry if they aren't careful.