{ "docId": "019dd923-622b-71dc-a6dc-327f028f6a26", "docSlug": "27ad4a25cc09", "documentTitle": "Dell Technologies (Class V / DVMT tracking stock) (DVMT)", "authorId": "14_Icahn", "authorName": "Carl C. Icahn", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2018-11-15 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 5, "pageCount": 20, "prevPage": 4, "nextPage": 6, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 8, "notes": "Uses aggressive, activist-style language ('magical accounting', 'hoodwinking', 'pernicious governance').", "elementsJson": [ "headline_text", "bullet_list", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6dc-327f028f6a26/5", "deckHref": "/decks/019dd923-622b-71dc-a6dc-327f028f6a26", "deckJsonHref": "/decks/019dd923-622b-71dc-a6dc-327f028f6a26.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6dc-327f028f6a26#slide-5", "components": [ { "bbox": null, "kind": "callout", "text": "They are now hoodwinking DVMT shareholders by offering the same shares, valued at $79.77, as currency to buy your stock.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-ee3d-779f-824d-d89cba9398f6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.1 }, "kind": "list", "text": "On July 2, 2018 Dell agreed to purchase all of the outstanding DVMT shares for a theoretical price of $109 per share, in cash and newly issued Class C Common shares of Dell, subject to a $9 billion cash cap.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3ab47b22-8534-49d3-b4cf-36e4c4484ac2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.45 }, "kind": "list", "text": "To achieve their valuation, Dell has used great imagination and financial engineering. For example, in coming up with their $109, Dell has used magical accounting to convert the tracking stock they are buying from us, which now trades at $99, to the VMware price of $152, thus capturing an incremental value of approximately $10 billion for their offer simply by waiving a magic wand.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6abd7123-0252-478c-b7e4-9c31baad0a4a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.65 }, "kind": "list", "text": "As recently as April 3, 2018, Dell had an independent firm value its Class C Common shares at only $49.28 per share for the purpose of equity awards and repurchases. Going back less than a year, on September 13, 2017 Dell valued the shares at $32.70 in a tender offer to purchase Class C shares. They are now hoodwinking DVMT shareholders by offering the same shares, valued at $79.77, as currency to buy your stock.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7e2c9989-1f15-435d-9441-a303a0b06b84", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.2 }, "kind": "list", "text": "Although Dell claims the $109 offer represents a 29% premium to DVMT’s closing price prior to the announcement, they fail to highlight that the $109 is a 27% discount to the true economic value of the shares.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e79e7f4f-5228-4e4b-b447-357a8e590a8d", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "share price: $109", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd952-ee3d-779f-824d-dd77d6280874", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.9, "x": 0.05, "y": 0.88 }, "kind": "source-note", "text": "1. Premium stated in Dell's S-4/A filed on October 19, 2018. Discount based on DVMT shares economic ownership of 1.014 VMW shares and market prices as of June 29, 2018. 2. DVMT and VMW prices as of close on November 8, 2019. 3. $49.28 and $32.70 Class C Common valuations from Dell's S-4/A dated October 19, 2018 and Dell's Tender Offer Statement Schedule TO dated October 17, 2017, respectively.", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9ff1a4d1-a830-4205-a369-4ed0ce2ac394", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.35, "x": 0.05, "y": 0.03 }, "kind": "title", "text": "Transaction Proposal", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d526525d-59c1-4b37-aecf-862e8c90e45e", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "52447852-bc6b-41ee-b4a1-14b1da97f8af", "evidence": "The slide explicitly calls out 'magical accounting' and 'hoodwinking' to expose perceived financial manipulation.", "confidence": 0.9 } ], "arcBeats": [ { "to": 8, "from": 5, "beatId": "c2aa4acc-5d25-4617-b2f9-918fc4b6a951", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Problem", "beatSlug": "problem-agitate-solution-problem-identify-pain", "evidence": "The deck identifies the problem of Dell's undervaluation of DVMT shares", "position": 0, "confidence": 0.8, "parentBeatName": "Complication", "parentBeatSlug": "complication" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }