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Dell weighing IPO options

An SEC filing from the vendor reveals it is musing over the idea of returning to public ownership but it has called on partners to remain calm in the face of the speculation

One of the main benefits that Michael Dell highlighted after the firm he named went private was the chance to be freed from the pressures of Wall Street.

He talked about the ability to take the longer view and draw up channel plans that might take a while to deliver returns, which might not have been so appealing to investors looking for quicker results.

But it is increasingly looking likely that the firm will return to a public status either through an IPO or some sort of combination with VMware, which has always remained a public firm.

In an SEC filing the vendor revealed that there were three broad options it was looking at:

•Business as usual – continue with the existing ownership structure
• Public offering (IPO) of Dell Technologies Common Stock
• Business combination with VMware

The firm stated that it would have liked to have kept its thoughts about the future to itself but because of VMware being public it had to disclose the musings on strategy.

"Nothing has been decided and alternatives are just being considered at this stage," stated the firm.

The response from Pat Gelsinger, CEO of VMware, was that it was not in a position to speculate on Dell's future strategy but it had been a good owner and helped the firm grow.

"The VMware management team remains laser-focused on serving our customers and partners with the best portfolio of software products and services across cloud, mobile, networking and security," he said.

The channel never welcomes disruption, which is usually exploited by rivals vendors, but the short SEC filing included a word of comfort for partners.

"While this process continues, it is business as usual for team members, customers and partners with no changes to current structures, practices and processes. There will be continued press coverage and speculation, and it’s important to stay focused on delivering for customers and closing the quarter strongly," the filing stated.

The firm also stated that since the merger with EMC it had paid back $10bn of debt. The level of borrowing that was required to fund going private and that mega merger have caused some concerns for market watchers.

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