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Dell shares plummet

by on17 September 2008

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Prophets of losses


Hardware maker
Dell has sent its share price into a spin by warning investors that corporate spending on technology is falling.

This is news to many investors who thought that on the whole the technology sector has been OK.  They fear that either the problem is specific to Dell or indicates broader problems in the market.

Dell's shares fell by 10 percent.  Other tech companies such as Sun and IBM also fell a bit on the comments. Dell said "conservatism" in information technology spending, which hurt its results for the quarter that ended August 1, has deepened during the current period and led to "further softening in global end-user demand."

It moaned about the slowdown that is being felt in the US, Western Europe and Asia, a sign that economic anxiety is spreading outside North America.

But the comments just do not reflect the rest of the industry, which has been growing. Electronics retailer Best Buy reported that its revenue rose 12 percent and  market-research firm IDC recently forecast that worldwide personal-computer shipments are expected to grow 15.7 percent in 2008 and that growth will stay in the double-digits through 2011.

What is strange is that there has been a big buyer of Dell shares lately who seems to be snapping them up at cheap prices.  This bloke should know a bit about what will happen to the company in the long term and probably would not be buying if he thought the future was bleak. Who is this man who is bucking the trend?  Come on down, Michael Dell.
Last modified on 18 September 2008
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