Dell buyback Unfair? Dell Stock Holder Lawsuit

Dell (Nasdaq: DELL) is being investigated for its $5 billion dollar share buyback program.

Do you own any shares in Dell?
Are you concerned about the buyback program?
Do you think the company should buy back shares or pay dividends?

According to recent Dell proxy statements, shareholder proposals to get Dell to pay dividends have been rejected, with management favoring using large cash reserves to buy back the company’s shares. Since that shareholder discussion:

Dell has announced a further buyback in the amount of approximately $5 billion, or nearly TWENTY percent of the market capitalization of the Company. Dell's repurchase of these shares adds to the $2.16 billion remaining from prior buybacks at the end of the fiscal second quarter, which ended in July 2011. Dell already spent $1.6 billion on buybacks through the first half of the year.

What is wrong with stock buybacks?

Although share buybacks can help shareholders drive up the share price by reducing the supply of shares, buybacks can also be used to secretly benefit management and boost executive compensation. Has Dell fully disclosed in the proxies the impact of the buyback program on executive compensation? To what extent has management conducted sales of their shares during these stock repurchases? There may be a serious conflict of interest. Management has a duty to maximize shareholder interests and the continuing large buybacks at DELL raise serious questions.

Additionally, why doesn't DELL pay shareholders dividends instead of using the money to buy back shares? What limits if any have been placed on the buybacks?

Upset? Kyros Law is investigating the fairness of this buyback on behalf of DELL shareholders, please call us now.

If you are a shareholder DELL please call Attorney Bill Kyros at 1-800-934-2921 to discuss your rights.

Kyros Law is a Boston-based law firm with significant experience representing investors in shareholder class actions, shareholder derivative actions, and securities fraud class actions. For info about our law firm please our Kyros Law web site.