Dell Computer and a Guy Named Brian

18 June 2007

Back in the 90’s when I worked in the R&D department at Cognos I worked along side a gentleman named Brian Slepanki.

Brian was in charge of the computer lab where I spent many days (and nights).  He was addicted to Coca Cola, cigarettes, and video games.  We had very little in common.  However, what we did have in common was a keen interest in the equity markets.  We always talked about stocks and the daily fluctuations of the market.

One morning Brain and I were discussing how in the early 90’s he bought his first Dell computer for a little more than $3000.  We talked about how little power the computer had and how it was rendered obsolete a few years after it was purchased.

After doing a quick calculation I let Brain know that if he had bought $3000 in Dell stock in the early 90’s instead of buying a computer then that stock would be worth a little more than $2 million in the late 90’s.

Brian went home early that afternoon.  He wasn’t feeling very well.

Dell has been the recipient of a lot of criticism lately.  Even one of my favorite bloggers, Seth Godin, brought up a 3 year chart of Dell recently and categorized the company as a former front runner that had lost.  How quickly people forget.

Despite Dell’s relatively stagnate share price over the past few years, Dell has an incredible history and has created billions of dollars in shareholder wealth since going public in 1988.  One only needs to glance at Dell’s stock chart dating back to 1990 to see the spectacular wealth creation.

As the short term focus of the investment community rears its ugly head it is incumbent on the investor relations team to remind the Street of past success and the current strategy for getting the company back on track.  In the case of Dell Computer, the master of the Company’s past glory, Michael Dell, is back as CEO.

Will Dell’s stock price rocket upward again like it did in the mid 90’s?  Probably not…or at least not in the same fashion.  The better question is – can Dell restore its once stellar reputation among the investment community?  Only time will tell.  Something tells me that Brian is out there watching.

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