01/14/2013 02:23 pm ET Updated Mar 16, 2013

Dell Shares Go Bananas On Buyout Talk

Dell shares are going bananas right now on rumors of a magical unicorn rescue, also known as a private equity buyout.

The stock was up about 18 percent at last check on Monday afternoon, after Bloomberg reported that Dell is in talks with two firms about going private.

"This stocks's going vertical," a Stifel Nicolaus analyst observed on CNBC.

It has been horizontal for several years because -- news flash -- people don't buy personal computers so much these days. the stock lost about half its value last year, and today's move doesn't make all of that up.

We've seen rumors like this before around troubled tech giants, and they typically don't pan out. Update: In fact, Jon Ogg at 24/7 Wall Street points out, Dell has been the subject of buyout rumors many times.

All this particular rumor is doing is causing short sellers everywhere to dump the stock, which has the effect of making it rise even higher. The Stifel Nicolaus analyst said this particular rumor does not seem to have "teeth," so he won't be recommending anybody buy Dell just yet.

Dell says it does not comment on rumors and speculation.

Update 2: With nearly $22 billion in market value and $5 billion in debt, Dell would be one of the biggest private-equity buyouts of all time.

Update 3: The consensus on this seems to be that it's much ado about nothing, that a ginormous buyout of a company with brutal competition and slowing cash flow is unlikely. Then again, the Wall Street Journal's David Benoit points out, the head of Dell's deal-making business just left the company for private-equity firm Blackstone. So there's that.



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