Friday, September 19, 2008

Dell Dives, Poor Decisions, Poor Results

So the quarterlies are out and Michael Dell will have to do some fast talking in coming months if he hopes to pull Dell out of the ever thickening quagmire he found it in a few short years ago, when he retook the reigns.

The ever excellent Times of London lead with "Dell shares dive to seven-year low after warning of softening demand"

A ten percent share drop, and a SEVEN YEAR record low share price promptly followed the release of the news that Dell was coping poorly in a faltering economy... Shares have fallen at Dell by over %40 this year, DESPITE a $3 Billion set of cutbacks, including the loss of over 8000 jobs and the closure of factories across the globe... Way to go Michael Dell!

Michaels wizardry lead to Dell slashing prices to increase market share, eyes fixated on #1 HP. Trouble was that the slashing lead to so little profit per machine sold as to make the whole project pointless.

Forbes came close to calling Dell a pack of liars when they ran an article on September 16 which quoted Dell as saying further softening in technology spending was behind the loss, while pointing out that investors seem to think the problem lies with Dell itself! Certainly Dells competitors didn't suffer from any softening.

In a report today, bloggers at CNBC were having a laugh over Hewlett Packards timely series of ads aimed squarly at and hijacking the "Dude" ads from Dell itself... the catch phrase of the ad is "Dude your dell died 5 hours ago". The CNBC bloggers even went so far as to ask if Dell is one foot in the grave already. Ouch indeed!

Anyway, serves the bastards at Dell right... as we have seen on Wall St. the American business model is well and truly broken and the generation of "best and brightest" who brought us to this point are among the friends and peers of Michael Dell. To be the "best and brightest" it is not enough to have good ideas which make tons of money, you also need integrity. Dell has not been honest with its customers for some time judging by the continuing howl from Dell Hell, now nicely echoed by the howls of the shareholders!

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