Silver Lake Group, L.L.C., a prominent private equity firm, has reported a significant divestment of Dell Technologies Inc. (NYSE:DELL) shares, totaling $54.3 million. The transactions, disclosed in a recent SEC filing, took place on December 5, 2024. The sale comes as Dell, now valued at $86.7 billion, has delivered an impressive 83% return over the past year.
The sales involved multiple tranches of Class C common stock, with prices ranging from $125.68 to $127.26 per share. The shares were sold through various entities associated with Silver Lake, including SL SPV-2, L.P., Silver Lake Partners IV, L.P., and Silver Lake Partners V DE (AIV), L.P. According to InvestingPro, analysts maintain price targets ranging from $115 to $220 for Dell shares.
Post-transaction, Silver Lake continues to hold a substantial number of Dell shares through its affiliates. This move comes amid a broader strategy that involved converting Class B common stock into Class C shares, a process that was part of an in-kind distribution on December 9, 2024.
Egon Durban, a director at Dell Technologies, is associated with Silver Lake and its affiliates. The transactions were conducted under indirect ownership, with Silver Lake maintaining its strategic interest in Dell Technologies through various investment vehicles.
In other recent news, Dell Technologies has seen a significant uptick in its financial performance. The company reported a 10% increase in third-quarter earnings, reaching $24.4 billion, primarily driven by the Infrastructure Solutions Group's focus on AI infrastructure and server solutions. Dell's earnings per share rose to $2.15, marking a 14% year-over-year increase. The company also declared a quarterly cash dividend of $0.445 per common share after a 20% increase in the annual cash dividend.
In terms of equity, Dell disclosed the issuance of 25 million Class C common shares upon the conversion of an equal number of Class A common shares by CEO Michael Dell. This action is part of the company's internal equity structure.
On the analyst front, TD (TSX:TD) Cowen maintained its Hold rating on Dell, citing underperformance in the PC segment and delayed revenue from AI initiatives. However, Mizuho (NYSE:MFG) Securities, Goldman Sachs (NYSE:GS), and Citi maintained positive ratings on Dell, adjusting their price targets accordingly.
In AI-related news, xAI announced plans to expand its Colossus supercomputer facility in Memphis by adding over one million Graphics Processing Units (GPUs). This move signifies the largest ever capital investment in the Memphis region. Fortune 500 companies Nvidia (NASDAQ:NVDA), Dell, and Supermicro Computer are also set to establish operations in the city, reinforcing its emerging status as a global hub for artificial intelligence.
These are recent developments that investors should consider when looking at Dell Technologies.
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