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Matt Levine

Carl Icahn Gets a Win Against Dell

Also scrip dividends and Goldman partners.

Dell Technologies Inc. has one class of publicly listed stock outstanding, a tracking stock (referred to as DVMT) that it issued as part of its acquisition of EMC Corp. in 2016 and that was supposed to track the value of EMC’s (now Dell’s) stake in VMware Inc. Earlier this year, Dell offered to swap the DVMT stock for regular common stock of Dell itself, simplifying its share structure and making Dell a normal public company with listed common stock.

Being Dell, though, it tried to do this on the cheap. It offered DVMT shareholders $109 per DVMT share, in a mix of cash and Dell common stock. This was doubly irritating to the DVMT holders. For one thing, it reflected a huge discount to VMware, which closed yesterday at $157.73, making $109 about a 30 percent discount. For another thing, that $109 was a somewhat hypothetical number: DVMT shareholders would get some cash but mostly Dell common stock, and there is no market yet for Dell common stock; Dell valued its stock at $79.77, but investors were skeptical. DVMT’s stock never traded close to $109, suggesting that they attributed much less value to Dell’s stock than Dell did.