Dell Buyout Offer Shows Descent From ’90s Peak: Chart of the Day

Dell Inc.’s acceptance of a buyout bid was a reminder of how far the third-largest U.S. maker of personal computers has fallen from its 1990s heyday.

The $13.65 a share that Michael S. Dell, the company’s founder and chief executive officer, and Silver Lake Management LLC, a private-equity firm, offered in the buyout was 73 percent less than the stock’s price at the end of 1999.

Dell led the Standard & Poor’s 500 Index during the 1990s, when its shares rose 88,918 percent. The CHART OF THE DAY shows how Dell’s performance since then compares with an index of 14 other S&P 500 stocks that ranked among the decade’s leaders. Each of them rose at least 30-fold during the ’90s.

Six of the leaders closed higher yesterday than they did when the decade ended. Amgen Inc., the world’s biggest biotechnology company, was the group’s top performer with a 44 percent gain. Altera Corp., Lam Research Corp., Linear Technology Corp., Oracle Corp. and Paychex Inc. also advanced.

Dell, based in the Austin, Texas, suburb of Round Rock, dropped more than any company in the leaders index. Applied Materials Inc., the world’s largest producer of chipmaking equipment, came closest with a 58 percent loss. Best Buy Co., Electronic Arts Inc., EMC Corp., Home Depot Inc., Intel Corp., Microsoft Corp. and Charles Schwab Corp. had smaller declines.

Sun Microsystems Inc. and WorldCom Inc., which rose more than 70-fold in the ’90s, were excluded from the leaders gauge because their shares no longer trade. Sun’s stock price plunged 94 percent by the time Oracle took over the computer maker in January 2010. WorldCom filed for bankruptcy in July 2002 and the phone company’s shares stopped trading 21 months later.

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

To contact the editor responsible for this story: Chris Nagi at chrisnagi@bloomberg.net

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