Private vs. Public

I think Michael Dell taking the company private again is an excellent idea. Having worked for a lot of publicly traded companies I have come to the conclusions that a company's growth and quality really starts to decline shortly after it begins trading publicly.

With a publicly traded company, the CEO is designated by the investors holding controlling interest in the company. Said CEO is required to take direction from the company's chief investors. Investors all too often have no real idea what is actually good for the company. They tend to be driven purely by short term quarterly gains. This leads to the CEO having to do thing he or she knows will ultimately harm the company's long term viability in order to justify his job to the company's chief investors. So every quarter is spent scrambling to meet the projected quarterly gains so that the stock price doesn't fall. While this is not invariably the case, my impression is that it represents the general rule.

Back when Dell was founded, its direction was singular. Michael Dell knew what he needed to do to grow his company. Once the company started trading publicly, even though he is the chief investor, he is still subject to the pressure of having to sacrifice long term profitability in order to keep the stock price from falling. Going private again allows Dell to make the decisions it needs to make to return to its true glory days.

I personally feel this way about all publicly traded companies. It really upset me when Newegg announced their IPO. To me it means the quality of service will start to level off and eventually start its long fall to obscurity.