Tomahawk, WI 9/16/2013 (BasicsMedia) – Dell Inc. (NASDAQ:DELL) has trading as a public company for a period of not less than 25 years now. This is good news for a company which had been struggling to stay afloat and remain relevant in an ever-changing industry greatly affected by the reduced demand for PCs, which it relies on mostly for revenue. However, its founder, on Michael Dell, has bought it back for a sum of around $25 billion, thus renewing his relationship with the company which bears his name. What are the likely results of this new development both for DELL and the industry?

DELL isn’t the only company which has suffered as a result of the shift in consumer behavior. Most consumers now prefer tablets and mobile devices over PCs, a trend which has seriously affected revenue earned by companies such as DELL. Consumers appear to be unwilling to continue buying laptops and desktops like the used to in the past years. This has forced companies which rely on such products to think of new ways of attracting and increasing revenue. In August 2013, the company had reported a drop in profit of around 72%.

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What Was Responsible for Dell’s Drop in Profits?

The drop in profits could be attributed to various reasons. One of them is that the sales for desktops and laptops have dropped down to levels which were unimaginable only a few years ago. Secondly, the company’s decision to cut prices in order to shore up the sale of computers has contributed to the reduced profits as well. There is a lot of optimism that the doom and gloom which have engulfed DELL for quite a while, may be about to disappear as Michael Dell makes a return to the company, with the backing of a number of lenders and investors.

How Long Does DELL Need to Turn Its Fortunes Around?

The process of making DELL a viable option to investors once again, will take a lot of time. Michael Dell estimates that a period of around two to three years will be required for the company to become attractive to investors and start churning impressive profits once again. The company will need to be realigned, and this is the sort of process which will be quite painful for all the concerned parties. If the company had remained public, under the watchful eyes of Wall Street, it may have required more time to turn its fortunes around than it currently does.

Does Everyone Support Dell’s Decision to go Private?

There has been strong opposition raised regarding Dell’s decision to revert to a private company. As a clear indication of this opposition, when the voting was called to determine this issue among shareholders, it had to be called off thrice. The main reason given by oppositionists is that they feel the company’s stock has been massively undervalued. While they appreciate the harsh times in which the company finds itself facing, they are convinced that DELL would still have fetched a higher price than the $25 billion Michael Dell paid to gain control once more.

The company has now said that it will invest more in PCs and tablets to ensure it doesn’t lose its share of the market (don’t forget that it is the world’s third largest PC maker). It plans to also grow its distribution network around the world.

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