Microsoft Corporation (MSFT): Has Dell Inc. (DELL) Become the Perfect Stock?

Lately, most of the discussion around Dell has been on the proposed going-private transaction from founder Michael Dell and private-equity firm Silver Lake Partners. Some investors, including activist Carl Icahn, believe that the proposed $13.65 per share price for the buyout is far too low. Icahn has proposed an alternative that would involve a leveraged recapitalization, borrowing in order to finance $9 per share special dividend, and then keeping the company public.

Regardless of whether Dell Inc. (NASDAQ:DELL) remains public or private, one thing that’s clear is that Microsoft Corporation (NASDAQ:MSFT) believes it’s essential to keep the PC-maker running. With the private-equity deal bankrolled in part by a $2 billion loan from Microsoft Corporation (NASDAQ:MSFT), the software giant sees the writing on the wall for a big chunk of Windows business if Dell exits the PC business entirely.

For Dell to improve, taking on more leverage is really the last thing it needs. Getting sales moving in the right direction will require innovative new products, and the company doesn’t have much time to deliver. Without a radical transformation, Dell Inc. (NASDAQ:DELL) won’t get far toward perfection anytime soon.

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The article Has Dell Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.

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