Michael Dell, the CEO of Dell Technologies, likes to boast about how great it is to be privately controlled.
No more 90-day shot clock. No more quarterly earnings reports. No more fretting over the gyrations of the company's share price.
Dell went private in 2013 as part of a $25 billion buyout led by CEO Michael Dell and Silver Lake Partners, ending a 25-year run as a publicly traded company.
Except that Dell Technologies is behaving an awfully lot like a public company these days. On Thursday at 7 a.m., Dell will be performing the public company ritual of having a quarterly conference call about its third quarter financial results.
So why is Dell doing this?
The answer stems from DVMT. That's the name of an unusual "tracking stock" Dell created when it purchased EMC Corp.
Dell created this tracking stock as part of its $58 billion purchase of data storage company EMC Corp. in order to track its economic interest in VMware. When Dell bought EMC in early September, it essentially purchased about 80 percent of publicly-traded VMware.
All of this means that Dell, which is headquartered in Round Rock and is the largest private employer in Central Texas, will behave in some ways like a publicly traded company.
Dell spokesman Dave Farmer said the type of financial information Dell will be reporting on Thursday is "essentially identical to what any publicly traded company would report." The company will also subjected to the other routine disclosures that the SEC requires of publicly traded companies, such as filing 8-Ks when material news is announced, or Form 4s when company insiders trade stock.
As part of its purchase of EMC, Dell was already required to report quarterly financial data, such as revenue, debt and cash balances, net income and operating income. They also disclosed executive compensation.
Still, Dell won't face the same pressures that public companies do because they don't have a stock that will yo-yo depending on their results.
The tracking stock is intended to mirror VMware's performance, Dell executives have said. But DVMT stock currently trades at about $27 less per share than VMware, which largely reflects investors' concerns about Dell's debt load after completing the expensive EMC deal.
It's ironic, said industry analyst Roger Kay, that Dell has gone private but now finds itself in the position of reporting financial information quarterly again. "We're almost back to where we started," he said.
News on Open Source is free and unlimited. Access to the rest of 512tech.com comes with an American-Statesman digital subscription, which also includes myStatesman.com and the ePaper edition. Subscribe at statesman.com/subscribe.