An era ended today. Dell Incorporated, the big computer company, is going private after 25 years as a company whose shares traded on the NASDAQ stock exchange.
Michael Dell, who founded the company 29 years ago in his University of Texas dorm room, is joining with an investment firm to buy up all the stock in public hands in a $25 billion transaction.
Dell thinks this will help him refashion the company without having to please Wall Street with glowing, growing profit reports every quarter. Dell’s margins have been declining for years.
It wasn’t always that way. A decade or so ago, Dell was king – the hottest of the hot computer companies, making desktops and laptops at lightning speed, using revolutionary manufacturing techniques that were the envy of everyone.
But the lesson for Dell, and for you as an investor, is this: Leaders don’t always stay that way if competitors can copy or out-innovate them, or if they fail to keep up with changing customer tastes or technologies. Think: Kodak, or GM a few years back.
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