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Comment by sosuke | Hacker News Reader

This logic is terrible. The share holders would have never gotten $17.62 so why are they being awarded $3.87 per share with interest?!

Reminds me of the land taxes on the value of the property. The value of the area goes up, the house is taxed into a higher bracket because it is worth such and such. But no one will buy it for that appraisal so how can it have that value?!

Or collecting comics or coins. My comic book is valued at $1000! Great, but no one will buy it for that much. I only get $500 offers for it. Things are only worth what they are actually exchanged for.

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As Dell's vision was realized, the market price would have reflected the increase in value.

This means the more disturbing part is that the judge has had 3 years of hindsight where parts of Dell's plan have been realized, making it appear as though they were inevitable when at the time it was still highly uncertain (as reflected in the stock price). If Dell, Inc was now in the shitter he wouldn't be awarding $3.87 / share, that's for sure.

The baffling part to me is that he found Dell (the person) and the board conducted themselves ethically during the buyout, yet still found in favor of the plaintiffs. The rule of thumb with management-led buyouts is that the shareholders are getting screwed. If he wasn't hiding information, and wasn't strong-arming the board into approving his offer / not soliciting other offers, then the accepted offer should stand.

I am surprised at the amount of misinformation in this thread (have people actually even read the post? It answers most of these questions!).

> This means the more disturbing part is that the judge has had 3 years of hindsight where parts of Dell's plan have been realized, making it appear as though they were inevitable when at the time it was still highly uncertain (as reflected in the stock price). If Dell, Inc was now in the shitter he wouldn't be awarding $3.87 / share, that's for sure.

That's not what the judge was ruling on, and it's not cited in his decision explaining the numbers (agree with him or not, his reasons are compelling for how he arrived at the numbers). The ruling is that at the time of the take-private, Silverlake must have valued the company at his price - the highest price - because if not, the purchase would not have offered a compelling return for a private equity investor. What's happened in the last three years did not enter the equation.

When you do valuations you must take risk into account, and with the benefit of hindsight it is far too easy to imagine that 3 years ago the future as it played out was more inevitable than it actually appeared at the time.

Hindsight bias is usually unconscious, so its unsurprising that it is not cited in the ruling.

Your last sentence suggests that every acquisition is a swindling of shareholders, but again, you are not taking risk into account, and perhaps the judge did not either. Most professional investors do not adequately adjust for risk, so why would I expect a judge to?

I am not offering an opinion on the matter, so I don't know what you mean by me not taking into account risk. You were inferring things from the judge's verdict that were not correct and I was merely pointing them out.

I don't know why you are trying to make this point about adjusting for risk when the entire question revolves around what the stock was worth at a stationary point in time three years ago. There is no risk basis to the calculation as discussed here - it's not a question of the judge possibly taking it into account or not, the judge absolutely did not factor it in. Whatever has happened in the world in the ensuing three years would not have affected this lawsuit either way.

> I don't know why you are trying to make this point about adjusting for risk when the entire question revolves around what the stock was worth at a stationary point in time three years ago.

That you don't see how these two are connected is my point.

Let me take a step back. The value of a company is the sum of the cash that can be taken out of the business in perpetuity discounted back to present value.

A common mistake is thinking that you can nail this down to a precise figure. In fact, it is a range of potential values. Why? Because the future is uncertain, and those future cash flows are uncertain. In other words, there is risk involved. So in the optimistic scenario where everything in the business goes right, you get a high valuation. In a pessimistic scenario the valuation is lower. Which is correct? Nobody can tell from the outset.

Now imagine you are doing a valuation for a business, but for the value of that business 3 years ago. You have had the advantage of seeing the trend those cash flows have taken the past 3 years, and whether you admit it to yourself or not, it will influence your valuation. That is all I am saying.

> You have had the advantage of seeing the trend those cash flows have taken the past 3 years...

And what exactly are those trends? Dell has been private for three years, how the company is doing is not and has not been public since the deal closed. I see how they're connected and I understand your point in aggregate, but it's 1) not relevant in the first place and 2) even if it were, the positive economic picture you're painting isn't even apparent - Dell could be a disaster right now and nobody would know (and the judge still would have ruled similarly.)

>how the company is doing is not and has not been public since the deal closed

This is untrue. Dell has released financials at least once since they went private, when they were bidding for EMC.

The worrying part is the value is something NO ONE will pay.

"Things are worth what people will pay for them" is pretty much rule #1 for valuations.

I find it interesting in general how people, after seeing a one-sided video or article or whatever, wonder "how can X be so irrational and stupid"?

X can be a judge, a politician, etc. This is often followed by something about conspiracy or incompetence by simple selection. But still, people rarely think about what really went on in the head of the X. They just like to strawman X and reshare the narrative.

It often turns out (at least 50% of the time) that there is more to the story and X's decision process is actually reasonable given all the facts they has to deal with.

But I am impressed by why people have a tendency to ignore that.

I guess in a meta way, my own comment engaged in the same thinking to some extent, about commenters.

I will say one more thing though: the # of comments a political item gets indicates how controversial it is, while the # of shares it gets indicates how many people agree. Horizontal vs Vertical measures. Anyone write about this?

In a non judicial system I would agree with you.

In a judicial system, the decision maker should document the facts and reasoning that were considered to arrive at the conclusion.... some of it is included in the article ....

The people that are going to get the difference are the ones that were against the buy out at the price that was offered.

I think that number was reached by trying to figure out how much value the shareholders would have had if they'd held on (for a long time) and eventually sold after the current plans had come to fruition.

The flaw in the logic is likely in that it de-valuates the risk associated with holding on to the shares, particularly in a short term focused market. Also, that over time business strategy and direction change. Finally if they thought the price was too low why did they sell in the first place?

Actually, the judge did it pretty much entirely opposite what you're saying. The judge chose the final number largely because he ruled that Silverlake, the private equity portion of the deal, would need to make 20-30% to justify the price of the deal, hence Silverlake's purchase at the lower number actually justified, to him, proof of the price he chose. If Dell wasn't actually worth a 20-30% premium from their purchase price, Silverlake wouldn't have done the deal is the theory. (There are of course issues with this, but this is the logic used.)

I love this logic because it implies that if a private equity firm buys a company, the shareholders are automatically being screwed and should sue.

That's usually a good assumption.

If you're an existing shareholder when a company goes private, you're forced to sell at a set price. That's why it's a legal issue. That forced sale is not a free market transaction.

If you look at the history of leveraged buyouts ("private equity" is usually powered by borrowing against the company's assets, not a pure cash transaction), the existing stockholders generally lose.

65% of Dell shareholders voted for the deal, in what seemed to be a fair process. (Michael Dell wasn't allowed to vote his own shares, and non-voters counted as voting against.) Any time people vote someone is "forced" to accept an option they voted against, but the process can still be fair. If equity holders usually get screwed by leveraged buyouts then they should start voting against them.

I agree with the author that having a judge determine the correct price seems perverse.

Not really a fair number to quote when Fidelity accidentally voted a huge number of shares in favor.

As noted in the footnotes, at a cost of $160MM to them based on this verdict! Oops indeed.

This came up in the wherein discussion. Should it be legal for 50%+ to see over the rest? Should minority owners have any other recourse?

I get that this isn't a democratic government where we have to guarantee full protection under the law for an individual but what I'd the 51% decides the sale price should be 1picodollar per share and then the new owner awards the 51% with shares effectively giving back their ownership? I imagine this won't happen in real life but just as a thought experiment... should it be OK?

There are several existing laws that can be applied in a scenario like that, e.g. anti-syndicate, anti-collusion, anti-bribery laws etc.

They all sound like criminal charges? I anal but I was thinking more of civil remedies if possible.

No, I don't your example is OK. I don't know what law it violates, but I doubt it would be allowed. And there are many real world examples where management acquired a company cheaply because they hid the true value of the company, or didn't pursue competing offers. Acquisition by management is super conflicted and should receive a lot of scrutiny.

However, according to the article the judge thought the process was fair, that there was no way to sell the company for a higher price, and shareholders voted for the deal while possessing all relevant information. I think that given those facts the deal price should be considered fair.

> hid the true value of the company

Boy, that's certainly a can of worms. Is someone who builds up a great company with low equity, then intentionally runs it badly to lower the share price, acquires more shares, and then runs it well again, guilty of something? Or is that just how incentives work—they felt like they needed more investment in the business before they could give their all to it?

This is why picking stocks is more difficult than looking at a PE ratio.

Does the board of directors contain competent and trustworthy people? Does an activist investor wield outsize influence? Are buyout rumors circulating?

Hard to know these things, that's a big part of why index funds are so popular.

This is not just a reply to you, but to everyone who is making a similar point: if you own a minority share in a company, you should realize that you can rarely call the tune. There are a great many issues in the running of a company that you are not entitled to dictate, and this is one of them. What is the better alternative to '50%+ seeing over the rest'? <50% seeing over the rest? If so, which minority?

Furthermore, even a passing acquaintance with human nature should lead you to the conclusion that people will routinely claim they are being screwed even when they are not.

Anybody remember when Corporate Raiding was a thing?

If not overturned on appeal it could set an interesting precedent to argue that in court for all other private equity buyouts that have ever taken place.

My above comment is incomplete when it comes to this point; that implication is not actually the case here.

Normally this is in fact not the case, because the acquirer has some sort of strategic reason behind their purchase that they believe will boost the value of the asset aside from simply operating the company as it had planned on doing prior to the acquisition. For instance, Silverlake/Dell is in the process of buying EMC - Dell/Silverlake believe that strategically, a combined Dell/EMC (or "Dell Technologies") is worth more than both companies on their own - but it's Silverlake/Dell/bond holder's cash that will make this happen. Therefor it's not realistic for current EMC shareholders to simply claim the value of EMC should be higher on its own because the purchase relies on operating synergies between Dell and EMC.

The Dell buyout by Silverlake is completely different, because throughout the sales process, it was clear that Michael Dell and Silverlake were not going to do anything to alter Dell's operational plan - that is, everything that Michael Dell and Silverlake were going to do to the company while private is pretty much exactly what the plan was had Dell remained public. So the judge decided to rule that Silverlake must have valued Dell at approximately what he ruled them to be. The case would be very different if Michael Dell/Silverlake were taking the company private and making major strategic changes to its businesses (shareholders could still sue, but the line of reasoning from the judge would be different).

I don't understand all the rules at play here, but from a fairness standpoint, you shouldn't be forced to sell. That is the real problem as I see it. At least people forced to sell here got some money to kind of even things out.

Can someone enlighten me here? What is the reasoning for allowing people to buy from people who don't want to sell?

I think the buyer gets a large majority of the votes from the shareholders to sell at $X/share.

That's what is in the shareholder agreement.

(some sort of majority rule that is)

If it's in the agreement, how can they have a leg to stand on? They agreed to such a thing!

When you're forced to sell at whatever price, you lose any claim on the future price of the stock.

If a court can give you more money later, then you effectively weren't really forced to sell the stock. You retained some sort of "ghost ownership" with an entitlement attached.

Thus, effectively, the provisions of the shareholder agreement which have to do with this are disregarded.

My comment is a response to the post it is attached to, not an analysis of the case.

That Dell was an insider probably complicates how to analyze this particular case.

As someone in a sibling comment posted, there is a statutory right in Delaware (where Dell was incorporated) allowing shareholders who don't vote for a buy out to demand judicial appraisal for the 'true' value of their shares.

Think of it more as a hard asset rather than as voting rights in a company:

Through one reason or another, you and I both own portions of a house. I own 95% of it, and you own 5%.

I want to sell, because I would like to have the money. You believe if we wait a year we will make more money. Is it fair that your very much minority position could prevent me from selling my much larger stake? It's a house so chances are we can't sell it piecemeal (which is unlike stock of a company, but very similar to going private as a company!)

Except you point of the very problem with your argument. Stocks are liquid as small percentages of the company. It is quite possible for a single individual/organization to accumulate the vast majority of the shares/control of a company without forcing anyone to sell.

I've been through this a few times with stocks I've held, and rarely am I happy about the outcome. For example about 10 years ago I saw something that apparently no one else on wall street saw, so I purchased a number of shares in three competing companies in proportion to how well I saw them profiting over the next 5-10 years. It wasn't 6 months later that Warren Buffet announced he was buying the company I had bet on the heaviest.

Lets just say that I'm still sore about it 10 years later. I even checked the, "I want my stock converted to BRK/A" but they ignored it, because I was going to have too small a fraction of a single share of BRK (which would have been amusing by itself). Heck, in the 10 years since BRK/A has again doubled.

So, IMHO, its just another case of the market being rigged for the big investors.

Why didn't you buy shares of brk/b on the day your sale closed?

Without speaking on the GP's behalf, perhaps the leverage in a particular strategy represented by investing directly in the company made the risk worthwhile whereas the more diversified, risk-averse but lower-leverage investment represented by BRK/B was not?

Yah, basically, what I did was buy more of the competing companies, even though I didn't think they were as as well positioned. Turned out to be a fine investment, better than the BRK would have been.

Doubling in 10 years is a tick over 7% per year, hardly an amazing missed opportunity.

There is no right answer- it depends on how the company was set up, which in turn reflects the type of company it's founders wanted it to be.

We changed our company constitution for this exact reason. We felt that it was important that the majority owner could present an empowered, decision making face to the outside world, rather than having to start any discussion with"I'm here to talk, but I need to run anything past all the other owners".

This does impact on the rights of the minority owners - a 2% owner can't hold up or influence an acquisition for example - but the upside is that their shares are worth more than if the company was controlled by a squabbling rabble.

Having gone from a majority owner to a minority one, I still feel this was the right move for us.

As maxerickson said, this possibility should be covered in the shareholder agreement. For that reason, any shareholder is already responsible for factoring in the risk of a buyout-by-vote when they buy shares. They were already responsible for making their own decisions as to "fairness" of that agreement. No information was hidden before the buyout, according to the article, so no "evening out" should be necessary, as far as I can tell.

> this possibility should be covered in the shareholder agreement.

1. It's a statutory right, so it doesn't need to be and generally isn't covered in shareholder agreements: By law in Delaware (where Dell was incorporated) and probably most other U.S. jurisdictions, minority shareholders who don't vote for a buy-out, and don't otherwise consent to it, can't stop the buy-out from going through, but they have the right to demand a judicial appraisal of the "true" value of their shares. [0] [1]

2. Also, public companies normally don't even have shareholder agreements among all shareholders. The articles of incorporation and the bylaws are probably the closest approximation. In many jurisdictions, the board of directors can unilaterally change the bylaws without shareholder approval. (Shareholder approval is often required for changes to the articles of incorporation, though.)

[0] https://www.sec.gov/Archives/edgar/data/878280/0001193125082...

[1] http://www.jonesday.com/newsknowledge/publicationdetail.aspx...

Okay, I did not know about this law. Thank you.

So, exactly what happened here.

And the buyer should have priced in (and probably did price in) the risk that this sort of thing can happen. I mean, this is not the first time this is happening. It's not like anyone hid the fact that minority shareholders who objected to the sale and met certain conditions could receive more money after going to court.

Buyers are often only interested in buying 100% of a company. If an all or none bid comes in, either the people who want to accept or the people who want to reject are going to be unhappy. When setting up a company you have to plan how to deal with this possibility in advance, without knowing the specifics of any offer. Most large public companies come to the conclusion that letting the majority decide is the fairest thing to do, and most shareholders know that's how it works when they are buying the shares.

Could you explain a little bit why private buyers often only interested in 100% of a company? thanks

Probably so they no longer have to go through all the reporting and auditing required of a publicly traded company.

It isn't realistic with stocks. Are you really going to go get 100% consent from every single person that has stock in company? Even the people that only hold 100 shares (or 1 share for that matter)? You would never be able take publicly traded company and make it private this way.

I don't think that's really a bad thing. If it's failing then the stock holders get nothing and assets get put on the market. If some piece is worth more then you can just sell that off. But, if company is public and profitable then what's the upside for society?

If a company is failing or doing poorly in the stock market, sometimes a private buyout allows them to back off the quarter-to-quarter demands or to incur debt needed for expansion/R&D/acquisition etc. this freedom can enable a company to turn around, grow, etc - that's better for society than having it flounder for a few more years while bleeding...:

There are two main ways to force existing shareholders to sell:

1. You buy 51% of the shares (and voting rights), make an offer to buy the remaining 49% and call for a shareholder meeting to vote on the offer. You have the majority, vote yes, and acquire the company.

2. You acquire 90% of the shares. You don't even have to call for a shareholders vote; you can acquire the company immediately and squeeze out existing shareholders who are forced to sell and the offer price.

You can either acquire shares by submitting a tender offer (offering to buy shares at a specified price from shareholders) or tapping the public markets (and disclose it). If you think about this a bit more, you'll see there are ways to game the system by, for example, buying enough rights then making a low-ball offer but most of the loopholes are well covered by corporate law.

To address your complaint on fairness, yes, you can be forced to sell because if most of the shareholders want to take the company private, it would seem fair from the majority's standpoint to accept its rule. Not perfect but I don't think there exists a better mechanism.

>To address your complaint on fairness, yes, you can be forced to sell because if most of the shareholders want to take the company private, it would seem fair from the majority's standpoint to accept its rule. Not perfect but I don't think there exists a better mechanism.

Why not just allow the option to let the company go private but let these stockholders retain their minority holding? If you, like the PE firm, think the company is undervalued by at least 20-30% why can't you just retain ownership through the deal and receive your proportion of dividends?

It's a good observation. Private companies with more than 500 shareholders have to obey a different sets of rule from those with fewer owners and must disclose financial performance in a way similar to that of public companies. Most of the time, you'd except to have more than 500 small shareholders that won't willingly sell.

because you aren't a qualified investor and the SEC mandates certain obligations that the company must comply with to have you as an owner.

The company cannot solicit or sell non-accredited investors securities but they can remain owners if securities where previously purchased.

http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=8edfd12967d...

That is the greatest rebuttal of all time. There's no way I'm going to read that page so, instead, I'll just thank you for your diligence and be on my way.

I agree, I'm going to save that URL for any future discussions on HN regarding anything.

Not so fast on #1 and #2. You're required to inform the company and the public if you're gathering up a high number of shares, and you need to declare an intent for hostile takeover, and there are rules around that.

You can't simply start accumulating shares silently on the public markets and then suddenly declare one day "I own 51% shares and now all your shares are worth 1 cent each muahahah!!!"

>from a fairness standpoint, you shouldn't be forced to sell

This is absurd. If you don't wish to be outvoted in the sale of a public company, then don't buy shares in a public company. This is the deal you agreed to when you bought in. As a minority shareholder, you don't get veto power. You cannot unilaterally block a sale any more than you can unilaterally evict the board.

Nor should you be able to. As unfair as it may seem that someone else can force you to sell[1], it's just as unfair for you to be able to destroy other shareholders' value by blocking a sale.

[1] It's actually not true that you are forced to sale. Just as if you own part of a house and the other party wants to sell, you have the option to buy instead. You can pony up the cash to buy the house at market value, and your can do the same and buy the whole company. Can't afford that? Tough. You don't get to deprive other stockholders by torpedoing the same.

Agreed. I am sitting here baffled hoping someone with a finance background comments and explains why this makes sense.

Wouldn't this ruling mean that going forward private equity companies will pay even less for companies, building into the price that somewhere along the way they will get sued and have to pony up some more?

The argument is that some people were compelled to sell at this low price, and a fair price (the nearly-$18 number) is about what would have persuaded them to sell. All the high-sounding ideas about making arguments by offering to buy ignores the fact that this wasn't a market deal: small shareholders were compelled to sell whether they wanted to or not, and the board had a fiduciary interest to them.

Ah - that does make sense. They were looking out for shareholders who didn't have a choice who would have been happy to wait for years to realize their gains.

I think your second point above is right, though. If this reasoning applies to pretty much any LBO, it has to be factored into the price of future LBO offers.

But all shareholders should have factored in the risk of this situation arising when they purchased the shares, should they not have? The risk of a future buyout-by-vote was always present. This scenario, I assume, was covered in the shareholder agreement?

And that shareholder agreement doesn't say that after the buyout occurs, those who no longer own the shares are entitled to fantasy money.

Yes, but the the situation they agreed to was not "majority shareholders can force them to sell for whatever they want. Period." It was that they can be forced to sell, and then they can go to court and say that the price they got was not a fair appraisal of the value of the stock. Now they're arguing that $13.75 was not a fair appraisal of the value of the stock.

It sounds like they don't have to factor in the risk of others not doing their fiduciary duty, because the courts will enforce it.

Okay, yeah, dctoedt points to the law[1] where this is described. I did not know about this law.

Interesting, though, that the courts' appraisals are trusted over the market in this case. It's sort of like an anti-crowd-dynamics protection, but only for people who vote no. Your decision over whether to vote no is influenced by your knowledge of likelihood for the total vote to succeed, as henrikschroder mentions[2].

[1]: https://news.ycombinator.com/item?id=11816921 [2]: https://news.ycombinator.com/item?id=11816784

There's plenty of bad decisions that a majority of shareholders can make, that a minority of the shareholders would be against, and which would decrease the value of the shares. But the whole points of shares in the first place is that one share is one vote, and if you want a larger say in the running of the company, you have to put up they money.

One risk when investing in a public company is every other shareholder, and in this case a majority of the shareholders voted to agree to the buyout price. Tough cookie for the minority holders who opposed it, but why shouldn't they bend to the will of the majority? Why should they be rewarded after the fact?

The precedence seems terrible to me, because as a shareholder in a future case like this, it is clearly beneficial to accept whatever buyout offer is on the table, and the immediately class-action sue the buyer for the difference between that and some fictional "fair" price. What happens if every shareholder does this?

If every shareholder does it, the deal doesn't go through in the first place. The court requires a shareholder to have voted against the deal in order to be a party to the lawsuit.

That seems like it sets up a perverse incentive structure, where shareholders should always vote against deals as long as the downside from the chance that their vote causes the deal not to go through is smaller than the upside from the amount they'd expect to gain from the lawsuit.

It's amusing that several of the issues raised in the recent security analysis of "TheDAO" raised exactly the same issue with their voting structure on Proposals. Namely, game theory showed the best move was to always vote No so long as the No vote wasn't the deciding factor in killing the proposal.

Yes. Many buyouts are immediately followed by a boilerplate class-action lawsuit that the terms were unfair. It's effectively protection-money, as the law firms who specialize in these actions settle in a predictable way, and class action means no shareholder can file a separate lawsuit in re the merger terms.

And this is the comment that makes the whole thing make sense, sort of, to me.

But then if judge's logic becomes the standard, then doesn't that mean you should always vote against the the deal if you think most people will vote for it?

If the standard is a 20% return on investment, then any buyout can be proven to be 20% undervalued, negating all benefit, so you're right, the natural response would be to reduce the bid to make up for that, but now that we have this precedent, we can assume they know about it and have even further undervalued any buyout, so we can prove in court that any stock is actually somewhere around 40% undervalued. But any buyer would anticipate this further proof of devaluation and lower their bid even further, so naturally we're going to approach zero bids on provably infinite value stock.

That's probably not right. Under mild assumptions, each successive update to expectations will be proportionally smaller in magnitude, and the price will converge geometrically to a somewhat lower (but non-zero) number.

It's the same reason why the government spending multiplier isn't infinite, even though government spending spurs private sector spending, and private sector spending increases the tax base.

I was wondering if someone might say something like this! Of course, my statement was meant to be absurd. I was just imagining the arguments of future lawyers explaining how their clients' stocks were infinitely valuable becuase of the assumed profit-seeking behavior and anticipation of lawsuits by investors.

I would be shocked if this did not get reversed upon appeal for that very issue - the precedent that would be set by this would wreck havoc on the market.

The point is that the shareholders bought it believing that it was worth $17.62. They were both willing and capable of holding it until they were proven right. However they were forced to sell for less than they thought it was worth.

To use your comic book example, if you own the comic book, you believe it is worth $1000, and you don't want to sell for a dime less, then it is wrong to force you to sell to someone at $700 just because nobody has yet offered you more than $500. That's theft which can be only made right by returning your comic book or by giving you the price you want.

The absolute best example of this were the beany-babies. I'll leave this set of pictures on the estimated values of beany-babies in 2008 from 1998, and their actual values in 2008: https://www.buzzfeed.com/hunterschwarz/how-much-beanie-babie...

Property tax is often based on its potential value instead of its current use. Just the possibility that the land could be rezoned in the future could increase your taxes.

That still doesn't make any sense. If the property isn't rezoned in the future, do they go back to previous tax payers and refund them the "excess" taxes? What if the property does better than was anticipated? Do previous tax payers now have to cough up more in arrears?

I was a Dell employee at the time and the consensus feeling at the time was that Michael Dell got the company for very cheap. Just compare the Dell stock price with its closest competitor HP. You'll see that between Dec 2012 and Dec 2013 HPQ doubled its stock price while Dell just went up by the ~35% premium that Michael Dell paid.

The logic only looks terrible until you follow the course of actions, read the arguments, understand the situation, and realize that actually it's a pretty fair and balanced process.

This is exactly the problem with the Chinese real estate market. Realtors conspire to keep property prices rising, refusing to show or list any homes that are priced too low, creating panic with consumers and eventually making those prices "real." It can only last for so long.

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