Michael Dell (Wikipedia photo)

Now, here’s one of the more interesting stories of the day. CNBC’s David Faber is reporting that Microsoft may invest between $1 billion and $3 billion in Dell as part of the computer maker’s plan to go private.

The investment would be a huge bet by Microsoft in one of its critical PC maker partners — perhaps giving it more control over the future of how personal computers are built and sold. Shares of Dell are up more than two percent on the news, with Dell now boasting a market value of $22 billion.

Private equity firm Silver Lake is reportedly in talks to buy Dell, with a deal in the $13 to $14 per share range potentially occurring as early as this week. Faber said the companies are still in negotiations.

Microsoft has used its huge cash pile to make strategic investments in the past, including deals with Nokia, Comcast and Facebook.

Could Dell be next?

Faber said it could be a “significant” move on Microsoft’s part, and may not necessarily translate into an equity stake. Microsoft has an earnings call set for Thursday, so maybe we’ll get the work later this week.

“(Microsoft) certainly has a lot at stake to make sure that (Dell) does well, because of course it sells an awful lot of software into those computers,” said Faber.

And what sort of financial impact would a $1 billion to $3 billion deal mean for Microsoft? Take this into consideration: It had $66.6 billion in cash, cash equivalents and short-term investments at the end of September 2012.

Here’s more from CNBC’s Faber.


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  • Forrest Corbett

    October 6, 1997 2:00 PM PDT
    Dell: Apple should close shop
    “What would I do? I’d shut it down and give the money back to the shareholders,” Michael Dell said before a crowd of several thousand IT executives.


    But others, like Dell, appear to think that Jobs’s expanded role isn’t helping. There is some concern that Apple will have a hard time recruiting a top-notch CEO because of Jobs’s presence.

  • http://profiles.google.com/ee2718 admin 1

    Hmmm… Microsoft is going to do for Dell what it did for Nokia.

  • dabble53

    Sounding more like early Standard Oil…..vertical monopoly, anyone?

  • guest

    what a terrible investment. Dell got into this position by making crappy products and providing crappy customer service. I don’t think Dell is coming back. MS would be better off spending this money on their own hardware efforts rather than invest in a poorly run Dell.

  • Guest

    I don’t see this at least not yet. $3million is far to little for Ballmer to pay for his bright ideas. aQuantive was $6billion and he wanted to spend $45billion on Yahoo.

    It’s worth blowing $9billion if it’s worth doing at all.

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