Could Michael Dell be Ousted
Carl Icahn announced on Friday, “If our board is elected, Michael Dell will not
be running the company.” The pair threatened a proxy battle if the Dell board
does not approve their offer. Securities & Exchange Commission released a filing
with a letter sent by Icahn and Southeastern to Dell, in which the pair propose
that shareholders would retain their shares and receive a choice of either $12
per share in cash or $12 worth of additional Dell stock. The offer almost
immediately drew the ire of some large shareholders such as Southeastern, who
argued that the company was worth more and publicly pushed for offers above $20
per share. Icahn and Southeastern claimed in their letter to represent nearly
13% of Dell’s total shares outstanding. “We have great respect for Michael Dell
for creating and building Dell and also for the ‘negotiating’ ability he has
shown in getting his Board to grant to him this almost absurd bargain,” the
letter read. “However, we believe all shareholders (at their discretion) should
have the opportunity to participate in the upside potential we believe is
present, not solely Michael Dell and an opportunistic buyout group leveraging to
the hilt the company’s own assets with very little of their own equity.” “This
company has suffered long enough from very wrong-headed decisions made by the
Board and its management,” the letter read. “Do not make another by putting the
company through an unnecessary debilitating proxy fight. Allow the shareholders
to decide for themselves which offer they choose.” The Dell board has yet to
publicly comment on the letter from Icahn and Southeastern. The pair said this
would be superior to the $13.65 per share buyout offer from Michael Dell and
Silver Lake, as it would allow shareholders to retain an equity “stub” in the
business and participate in Dell’s recovery.
Federal Reserve Chairman Ben Bernanke, in a question-and-answer session after
his speech Friday at a Chicago banking conference, said it was important to end
the "too big to fail" perception for large banks and said more action might be
needed even after Dodd-Frank and Basel III rules are fully implemented. Fed boss
devoted his speech to the vulnerabilities in the financial system that the U.S.
central bank is monitoring. "In light of the current low interest rate
environment, we are watching particularly closely for instances of 'reaching for
yield' and other forms of excessive risk-taking, which may affect asset prices
and their relationships with fundamentals," Bernanke said. Bernanke discussed
the threat of a run in money-market funds and the possibility that short-term
wholesale markets could dry up in a crisis. Fed Chairman said the legacy from
the financial crisis of four years ago remains, with the economy still not
regaining lost jobs and as the financial system struggles to deal with the
economic, legal and reputational consequences. The Fed is considering whether
big firms need increased amount of senior debt, per Bernanke. Fed Boss discussed
the way the central bank monitors market risks, including a fumbling reference
to whether Microsoft (MSFT) was overvalued. "It may still prove to be a bubble,
but so far, so good, right," he said of the software maker. Bernanke said that
shadow banking system still posed a threat to financial stability and funding
markets might still not be able to cope with a major default. "While the shadow
banking sector is smaller today than before the crisis, regulators and the
private sector need to address remaining vulnerabilities," Fed Boss said.
The U.S. Treasury Department reported Friday, a budget surplus of $113 billion
in April, the largest monthly surplus in five years. April is usually a surplus
month because of income tax payments. Tax receipts were $407 billion, up 28%
compared to April 2012, while spending was $294 billion, 13% more than same
period of 2012. Through the first seven months of fiscal 2013, the U.S. deficit
was $488 billion, 32% narrower than during the same period of 2012. April's
surplus was the biggest monthly surplus since April 2008.
Mothers Day is Sunday May 12 and we extend a very warm Happy Mothers Day to all
Mothers out there. Mothers Day was first celebrated in 1908 when Anna Jarvis
held a memorial for her mother in Grafton, West Virginia. The holiday is
celebrated around the world and designated as the second Sunday in May to honor
Milestone for Millennium-Traders, we are extremely proud to be one of the top 1%
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