Dell Technologies Inc. (NYSE:DELL) has reported the issuance of 26.5 million Class C common shares upon the conversion of an equivalent number of Class A common shares held by Michael Dell, the company's founder and CEO. The conversion occurred over two days, September 16 and 17, 2024, as disclosed in a recent SEC filing.
Following the conversion, Michael Dell's beneficial ownership totals 271.8 million shares of Class A common stock and 36.9 million shares of Class C common stock. This figure excludes an additional 29.9 million shares of Class A and 1.38 million shares of Class C common stock held by trusts associated with Susan Lieberman Dell, which Michael Dell may be deemed to beneficially own.
The company's certificate of incorporation permits any holder of Class A common stock to convert their shares into Class C common stock on a one-to-one basis at any time.
Such conversions may also occur automatically upon certain transfers, as outlined in the company's governing documents. Both classes of common stock carry identical dividend and liquidation rights.
As of September 18, 2024, after accounting for the recent conversions, Dell Technologies has a total of 333.9 million shares of Class C common stock issued and outstanding. The conversions were executed in compliance with the Securities Act of 1933, specifically Section 3(a)(9), which exempts such transactions from registration provided no commission or remuneration is paid for soliciting the exchange.
In other recent news, Dell Technologies has seen significant growth in its core businesses and artificial intelligence (AI) market, as reported in its recent earnings call. The company's Client Solutions Group and Infrastructure Solutions Group have grown 12% and 38% respectively. Furthermore, Dell is expanding its presence in the AI market, with a current $3.8 billion backlog in this space.
Analysts have also weighed in on Dell's prospects. Mizuho initiated coverage on Dell with an Outperform rating and a price target of $135, citing the company's diverse portfolio and robust free cash flow.
In contrast, Susquehanna issued a Neutral rating and a price target of $120, expressing concerns about the uncertain economic returns of AI hardware and Dell's strategy for scaling its AI services.
Evercore ISI maintained a positive outlook, reiterating an Outperform rating with a $140 price target, despite expected gross margin headwinds from a greater mix of AI servers and inflationary component costs.
InvestingPro Insights
With Dell Technologies Inc. (NYSE:DELL) experiencing significant shifts in its stock structure, investors may find the latest real-time data from InvestingPro invaluable for making informed decisions. As of the last twelve months leading up to Q2 2025, Dell has a market capitalization of approximately $82.74 billion, with a P/E ratio that stands at 18.35, reflecting a favorable valuation compared to near-term earnings growth. Moreover, the company's revenue during this period was $91.84 billion, despite a slight decline of 1.9%.
InvestingPro Tips highlight that Dell's management has been proactively buying back shares, signaling confidence in the company's value. Additionally, the company is recognized for its high shareholder yield. On the flip side, 16 analysts have revised their earnings expectations downwards for the upcoming period, which could be a point of concern for potential investors. However, it's worth noting that Dell is still anticipated to be profitable this year and has been profitable over the last twelve months. For those looking for more detailed analysis, InvestingPro offers over ten additional tips that could further guide investment decisions.
The technology giant, a prominent player in the Technology Hardware, Storage & Peripherals industry, also boasts a high return over the last year and has maintained strong returns over the last five and ten years. This historical performance, combined with the insights provided by InvestingPro Tips, may offer a comprehensive view of Dell's market position and future potential. For further information and tips, investors are encouraged to visit InvestingPro's dedicated section for Dell at https://www.investing.com/pro/DELL.
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