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Dell shareholders let's get to them they set.
They are set to vote tomorrow on founder Michael bill's controversial buyout bid that's if the vote happens with the New York Post is already saying today quote.
Dell's deal is dead meeting Michael bell.
So we bringing and we brought in a shareholder mark Travis intrepid capital CEO president.
He has one point one million Dell shares of his intrepid capital institutional fund.
All kinds shareholders both institutional individual -- taking sides right now.
Marc is joining us now from Jacksonville Florida mark let me just get right to it the two.
Big offers here are 15 Michael Dell and silver lake partners and the other is Carl Icahn and we're going to ask you right now.
Who are you going to vote for.
Colombo where Carl all the way was you know.
I think you know you've heard of -- taken a stock well to me.
Michael Dell's bottom take this you know you have some tax loss only year and the -- straight day and I'm boxing he magically appeared in.
-- thirteen 65 with -- help of his private equity friends and Silicon Valley.
And you know I frankly think they're still the company from shareholders at this price.
We're very conservative in our valuation techniques intrepid capital funds and down.
You know you look at the free cash -- this business owl saying put a ruler on it and it's certainly dropped off bad you know is that PC business -- trailed off here.
Last year so but.
If you look back to 2000.
Dell computer has generated anywhere from ten.
Three and a half to five billion dollars and free cash flow respectively for 2000.
Thirteen Winnipeg and about two point eight million dollars so they generate three and a half to five billion.
And the question is what would you pay for that end -- actually you know -- I think they offers lesson in -- free cash flow which -- -- -- Again these are very -- discount rate to adjust for the -- often.
One segment of the business not the entire business but only one of four segments.
We know we we get a pump prices couple dollars higher so I'm gonna sit here frankly like a stop and wait till I get it.
And and and I'm I'm with you at I'll tell you -- I'm with you.
Because it seems very obvious to me when my missing something -- Michael counsel for like her saying thirteen 65 a share -- -- You know slightly below that right now but it was above it at at many points between the time that he announced that and the -- and since then.
Then you Carl Icahn fourteen.
Dollars a share.
Okay and that warrants.
Depending on the circumstance it just seems like Carl Icahn.
And I believe he's serious about this sometimes you just jumps in for the fun of it but you know -- a series billionaire financier.
And I love to believe that Michael -- the -- is that really really wants to it to get control over this and improve the company but.
What do you think is is the real problem at -- and what do you think Carl Icahn would do to fix that.
I don't know exactly and I'm certainly not technologically savvy enough to answer what you do about the demise of the desktop.
You know PC.
You know I've talked a little bit earlier about the operations of free cash flow generation.
Let's talk about the balance sheet.
You know -- -- talk about a business with thirteen almost fourteen billion in cash seven billion really you know it.
You know so you got half the equity value today and cash if you say oh well -- -- the doubt you've got 25% this year pricing cash.
You know what what could we of enjoyed a higher dividend.
Over the course of the last 345 years its share prices.
Come down well or you know what can we re bought shares in the in the late part of 2012 and later not dollars and created some value because frankly.
You know a lot of -- -- destroy value of its -- -- above the intrinsic guy what is.
We just don't -- I'll tell that we're looking at a five year chart US I understand that started buying five years ago when the stock was in the high twenty spent 26.
Well you like about it then.
Mark but because that was sort of free tablet revolution right.
Liz that's probably an -- sum -- -- for five years -- that price sounds very half relative to our basis affect.
And you know -- -- a million once million shares to have viewers certainly a lot of capital.
It's not insignificant it's not a large position for us but.
I don't think we're under -- to the tune of half of this prize.
That we were probably close our bases at this point but.
What what we like is generally.
Management has some equity skin in the game.
A balance sheet this very stable and bulletproof which I tend to view -- -- a difficult industry is having.
And you know -- predictable free cash flow that you can discount and discern a value.
We want to commit capital where we feel like we get a discount to that carefully calculated intrinsic or private market value.
And so that's why we sat here as we wait for it.
Now we're looking at some of your other hold things there's big blocks you've got all kinds of other things Berkshire Hathaway mark.
Let me just pinpoint you do you think that the vote will happen tomorrow there all kinds of rumors that will be delayed.
You know -- I think is a giant poker game going -- right now you back out Michael -- 16%.
You gotta get a majority -- 84.
You gotta get to 42%.
That you back out Carl Icahn's Mason Hawkins -- southeast Atlanta southeastern asset management in Memphis.
Ichiro prices are racist -- -- it.
That's -- -- against street is voting against Michael Dell T Rowe as you mentioned black rock apparently is going to say no do you do you get the sense that.
That this is a name where if it hits a certain level you're out and what is that level.
Oh you mean upper decks -- not on the stop promise.
If it rises.
Is there a -- point where you say as soon as it hits this this level -- I'm gonna sell.
Well as I can honestly say we've got guys today and then you know between fifteen and sixteen dollars and so you know you certainly had some the loss of business as we've you know talked about earlier.
But you use very high discount right now is cash flows and a very not -- assumption about growth in that cash flow.
The discounted cash flow.
That's where we get you know 155016.
You know I think Carl Icahn and in southeastern asset manager on the right track and try to return -- my cash to shareholders.
You know if you really look at the share price.
Forget about five years ago we haven't been there that long we have been their extended period tally is five years but if you look at the share price since Michael -- came -- What is it now 40%.
-- it's down 40% about that dad hasn't been hasn't been a good run and the total opposite of something like Starbucks where Howard Schultz returned and Starbucks has done really well two totally different businesses I know but mark.
Just want to quickly mention how well your fund is down against its benchmark over the past year Europe 16%.
The benchmark is up 14%.
Ticker symbol ICM VX.
I cannot wait to hear what happens tomorrow we come back.
I'll be glad to -- -- have meantime thank you -- mark Travis intrepid capital CEO and president.
He's got about one point one million shares quote I'm going all the way with Carl Icahn.
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