Dell shares play 'how low can you go?'

CONTINUING ITS downwards slump to the bottom of the pit, Dell saw its shares falling to the lowest they’ve been for seven years at close of trade yesterday.

Dell, which usually has a rather sensible policy of keeping shtum about specific predictions on earnings or revenue, shot itself in the foot by releasing a depressing press release describing "further softening in global end-user demand".

No one likes “further softening” and investors are no exception, dropping Dell like a hot potato and sending shares down 11 per cent ($2.01) to an embarrassing close at $15.98.

It seems that Dell’s premature, er, speculation about a slowdown in global tech spending has left Wall Street cold and with the beginnings of a headache coming on.

It didn’t help that the firm admitted to a 17 per cent fall in earnings in the quarter to the end of August.

Dell has noted it will incur additional costs in restructuring and trying to frantically realign its business operations. Or flog off its factories.

At the Bank of America Investment Conference in San Francisco yesterday, the firm’s CFO, Brian Gladden noted "We saw a very weak August, weaker than usual". Blushing, he added "We haven't seen it snap back."

There, there Dell. It’s just the stress of the credit crunch. Happens to the best of them. Honest. µ

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