A Bloomberg report that Dell was talking with two private-equity firms about a buyout caused the company’s stock to surge 13 percent Monday. The shares rose another 7 percent today after Reuters said that talks were advancing with several banks lining up the necessary financing. While the impressive two-day rally lifted the stock up to $13.17, it erased only eight months of declines. Dell is still trading below its 200-day moving average – a reminder of how far Dell has fallen in the past year.
The rally has come despite widespread skepticism that a buyout will happen in a financial market still skittish about big, risky deals. Over at Fortune, Dan Primack gave the deal a one-in-five chanceof being brought to completion, making a detailed case for his skepticism. Wall Street analysts are also doubting the likelihood that enough financing can be lined up to pull off what would be the biggest corporate buyout since the Great Recession and one of the largest tech LBO’s ever.
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