Dell has agreed to pay US$1 billion to settle a lawsuit regarding a stock conversion accused of stripping billions in market value.
The controversial A$35.5 billion conversion of Dell stock in a 2018 deal, saw Dell founder Michael Dell and other controlling investors authorising the issuance of common stock in exchange for tracking shares, which the shareholder plaintiffs allege was done for billions below market value.
The lawsuit was set to go to trial in the Delaware Court of Chancery next month; if the settlement is agreed to by a judge, this settlement amount will be reflected in Dell’s third-quarter results, which will reported on Monday.
Given Dell’s $10.4 billion balance sheet, this merely “eliminates a modest nonoperational overhang on the company”, according to Bloomberg Intelligence’s Woo Jin Ho.
