On Monday, Dell Technologies Inc. (NYSE:DELL), a prominent player in the technology hardware industry with a market capitalization of $88.16 billion and impressive 67% year-to-date returns, disclosed the issuance of 25 million Class C common shares upon conversion of an equal number of Class A common shares by Michael Dell.
According to InvestingPro data, management has been actively managing shareholder value through aggressive share buybacks. This transaction, part of the company's internal equity structure, was executed in accordance with Dell's certificate of incorporation, which allows holders of Class A shares to convert their holdings to Class C shares on a one-to-one basis.
The conversion by Michael Dell, the company's founder and CEO, has resulted in his beneficial ownership of approximately 246.8 million shares of Class A common stock and 41.9 million shares of Class C common stock. This does not include additional shares held by the Susan Lieberman Dell Separate Property Trust and Susan L. Dell, which may also be attributed to Mr. Dell.
Following this conversion, Dell Technologies has reported that there are now 357.5 million shares of Class C common stock outstanding. The shares of Class C common stock issued in this transaction bear the same dividend and liquidation rights as the Class A common stock. The company maintains a dividend yield of 1.41% and has demonstrated strong shareholder commitment with a 20.27% dividend growth in the last twelve months.
The company has stated that this issuance was made without registration under the Securities Act of 1933, relying on the exemption provided by Section 3(a)(9) of the act. No commission or other remuneration was paid for soliciting the exchange of securities.
Dell Technologies has indicated that any future conversions of Class A common stock to Class C common stock are also expected to be conducted without registration, in reliance on the same exemption.
This information is based on a press release statement and reflects the latest changes in the equity structure of Dell Technologies as per their recent SEC filing.
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In other recent news, Dell Technologies Inc. reported robust growth in its third-quarter earnings. The company's total revenue increased by 10% to $24.4 billion, primarily driven by the Infrastructure Solutions Group (ISG) focusing on AI infrastructure and server solutions. Dell's earnings per share rose to $2.15, marking a 14% year-over-year increase.
Despite a slight decrease in the Client Solutions Group (CSG) revenue, Dell maintains optimism for fiscal year 2026, expecting growth in PC and server refresh cycles and a continued rise in demand for AI servers.
TD Cowen maintained its Hold rating on Dell, citing underperformance in the PC segment and delayed revenue from the Blackwell project's AI initiatives. However, Mizuho (NYSE:MFG) Securities and Goldman Sachs (NYSE:GS) reiterated their positive ratings on Dell, despite adjusting their price targets.
Citi also maintained its Buy rating but reduced the price target to $156 from $160, tying Dell's stock recovery to a robust AI pipeline and server momentum. Bernstein SocGen Group kept its Outperform rating, expressing confidence in Dell's long-term prospects despite a cut in Q4 revenue expectations.
These recent developments reflect Dell's strategic focus on AI infrastructure and server solutions, contributing to a significant surge in its ISG's revenue. Despite a slight miss in Q3 earnings, Dell recorded a record $3.6 billion in AI server orders, indicating strong market demand.
The company's AI server order pipeline also showed significant improvement, now estimated to be between $15 billion and $20 billion. These developments are noteworthy for investors, reflecting Dell's ability to capitalize on the growing AI market.
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