In a recent unregistered transaction, Dell Technologies Inc. (NYSE:DELL) converted over 5.6 million shares of Class B common stock into Class C common stock. This move, detailed in a Securities and Exchange Commission (SEC) filing on Friday, involved shares held by various Silver Lake entities.
The conversions occurred on multiple dates between June 18, 2024, and July 9, 2024, with the specific dates being June 18, June 20, July 3, July 8, and July 9. The parties involved in the conversion included SL SPV-2, L.P., Silver Lake Partners IV, L.P., Silver Lake Technology Investors IV, L.P., Silver Lake Partners V DE (AIV), L.P., and Silver Lake Technology Investors V, L.P.
Following these transactions, Dell reported that as of July 9, 2024, the company had 312,686,669 shares of Class C common stock and 66,359,626 shares of Class B common stock outstanding. Dell’s Class B shareholders have the ongoing right to convert their holdings into Class C shares on a one-for-one basis. Additionally, automatic conversion is triggered upon certain transfers as outlined in the company's certificate of incorporation.
Both classes of stock, Class B and Class C, share identical dividend and liquidation rights. The issuance of the Class C shares in these conversion transactions was executed relying on an exemption from registration under Section 3(a)(9) of the Securities Act of 1933. Dell confirmed that no commission or other remuneration was paid for soliciting the exchange of securities.
The company also indicated that any future conversions of Class B to Class C shares are expected to proceed without registration, utilizing the same exemption from the Securities Act of 1933. This information is based on the latest 8-K filing by Dell Technologies Inc. with the SEC.
In other recent news, Dell Technologies has seen a number of significant developments. The company's annual stockholders' meeting resulted in the re-election of all seven Group I director nominees, including Michael S. Dell, and the ratification of PricewaterhouseCoopers LLP as Dell's independent registered public accounting firm for the fiscal year ending January 31, 2025.
Moreover, Dell has received server orders from Elon Musk's AI startup, a move expected to fortify Nvidia (NASDAQ:NVDA)'s market capitalization. Dell is also collaborating with xAI for a supercomputer project, with the supercomputer expected to be operational by fall 2025.
The Equipment Leasing and Finance Association reported an 11% year-over-year increase in U.S. business equipment borrowings for May. Dell Technologies and Nvidia were notable contributors to this statistic. Analyst firms BofA Securities and Evercore ISI have maintained positive ratings on Dell stock, citing strong AI growth potential and the potential improvement in Dell's storage margins by fiscal year 2025.
These developments underscore Dell's active role in the AI sector and the growing demand for AI applications. As these are recent events, they are expected to influence the company's future performance. However, it is important to note that these are factual updates and should not be taken as an indication of future performance.
InvestingPro Insights
Amidst the corporate restructuring at Dell Technologies Inc. (NYSE:DELL), investors might find the company's financial metrics and market performance of particular interest. Dell has been demonstrating a strong shareholder yield, a factor that could be appealing to those looking for companies with a proactive return of capital strategy. This is complemented by the fact that Dell's management has been aggressively buying back shares, signaling confidence in the company's value proposition.
InvestingPro Data highlights that Dell is trading at a P/E ratio of 27.93, with an adjusted P/E ratio for the last twelve months as of Q1 2025 standing at 23.66. This positions the company at a low P/E ratio relative to near-term earnings growth, potentially indicating an undervalued stock. Additionally, Dell has shown a significant price uptick over the last six months, with a 78.92% total return, and an impressive 165.26% total return over the past year, which may attract investors looking for growth in their portfolio.
For those interested in further analysis and additional InvestingPro Tips, such as Dell's strong return over the last three months and predictions of profitability for this year, Dell's profile on InvestingPro offers more insights. There are 12 additional tips available on InvestingPro's Dell page, which can be accessed with an exclusive discount using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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