Dell Technologies (Class V / DVMT tracking stock) DVMT
Dell's $109 buyout of the DVMT tracker is really $90 — a 42% discount engineered to transfer $11bn from public holders to Michael Dell and Silver Lake. Vote no.
Thesis
Icahn Capital, holder of ~9.3% of Dell's Class V (DVMT) tracking stock, urges shareholders to reject Dell's proposed merger to repurchase all DVMT shares at a stated $109. By Icahn's math the offer is worth only $89.89 — a 42% discount to DVMT's $154 intrinsic value implied by VMware — because the Class C stock used as currency is overvalued ($79.77 vs. an implied $56.52 and Dell's own internal $33–49 marks). Coupled with a convoluted capital structure, ~$46bn of Dell debt, and 'opportunistic' DVMT buybacks since 2016, the deal would transfer ~$11bn from DVMT holders to Michael Dell and Silver Lake, doubling their VMware economic stake from 32% to 64%. Threats of a forced IPO or 'status quo' are dismissed as scare tactics that would trigger Delaware entire-fairness litigation. Recommendation: vote AGAINST on December 11.
SCQA
Dell's publicly traded Class V (DVMT) tracking stock was issued in 2016 to fund the EMC acquisition and was supposed to track VMware within a 5–10% discount, but instead has traded at a ~35% discount under a punitive governance structure.
Michael Dell and Silver Lake now propose to swap DVMT for cash plus Dell Class C stock at a stated $109 — a price that relies on an inflated $79.77 Class C valuation versus Dell's own internal marks of $33–49, indirectly transferring ~$11bn to the controlling shareholders.
Shareholders should vote AGAINST the merger at the December 11 special meeting; Dell must instead pay a price that reflects DVMT's true VMware-linked value, and any retaliatory forced IPO conversion will be met with Delaware entire-fairness litigation.
Fair value of DVMT today is ~$154/share (vs. the $90 effectively offered), and VMware itself — using IBM/Red Hat comparables — could be worth $300/share, implying multibillion-dollar upside that the current deal would hand to Michael Dell and Silver Lake.
The three reasons
- 1
Dell's $109 offer is really worth only ~$90 — a 42% discount to DVMT's $154 intrinsic value
- 2
Deal transfers ~$11bn from DVMT holders to Michael Dell and Silver Lake via overvalued Class C currency
- 3
IPO and 'status quo' threats are empty: forced conversion invites Delaware litigation, Dell core is over-levered
Primary demands
- Vote AGAINST the proposed Dell/DVMT merger at the December 11 special meeting
- Force Dell to raise the offer to a price above the current VMware market value (a premium, not a discount)
- Reject the 'forced IPO conversion' and 'status quo' threats as coercive scare tactics
- Hold Michael Dell, Silver Lake and the independent directors accountable under Delaware 'entire fairness' standard
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- 2013 Dell go-private fight (Icahn forced increased shareholder remuneration)
- IBM's October 2018 offer for Red Hat (used as VMware valuation comp)
Notable slides (6)
Notes
Proxy-fight deck released ~3 weeks before the December 11, 2018 DVMT shareholder vote. Co-opts Dell's own corporate branding (Dell Technologies logo bottom-left, Icahn Capital L.P. bottom-right) — a pointed visual choice. Heavy use of management's own quotes against them: Dell CFO calling DVMT discount 'opportunistic' (Dec 2016 / Mar 2017), Dell IR boasting about 'using those proceeds to buy DVMT' (June 2017). Distinct mix of valuation argument (sum-of-parts on p.6, VMware DCF/comp on p.17), governance critique (capital structure diagram on p.10), and legal threat (Delaware 'entire fairness' on p.15). Date inferred as mid-November 2018 — cover says 'November 2018', references VMware closing price as of Nov 8, 2018. Outcome: Dell ultimately raised the offer to a sweetened deal that closed Dec 28, 2018; Icahn dropped litigation and the campaign is generally treated as a partial win (price was bumped, but the merger went through).