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Illustration: Rebecca Zisser / Axios 

Dell Technologies is working with Wall Street on some sort of major financial transaction, although specifics remain elusive.

Bottom line: The company is under pressure from the new tax plan, which means Michael Dell may need to rethink his aversion to being a public company CEO.

The latest

CNBC reported yesterday that one option is a reverse merger with VMWare, in which Dell holds an 80% stake via its $64 billion purchase of EMC. This comes after a Bloomberg story that Dell could IPO itself or buy out the remaining VMWare stake.

Why now?

Debt. Around $51 billion of it to be exact. And, as we discussed yesterday in Pro Rata, the recent tax bill is particularly tough on highly-leveraged companies (despite lower corporate rates). Had Congress included a grandfather clause, then banks like J.P. Morgan might not have recently reconstructed their Dell teams.

A big hurdle

Michael Dell originally took his company private, in part, because he absolutely hated being a public company CEO. And he maintained that posture years later:

Conventional wisdom was that when buyout sponsor Silver Lake wanted an exit, Michael himself would do the honors. But that became a much dicier proposition after the EMC deal and, again, those subsequent changes to interest deductibility.

Other options

Because it's still hard to see Michael Dell voluntarily rejoining the land of "circus clowns," we've got to entertain some alternative possibilities:

  • Michael Dell transitions into a non-CEO role, perhaps to be succeeded by VMWare's Pat Gelsinger;
  • New asset sales/public floats to pay down debt; or
  • Some sort of private transaction, perhaps with the help of a deep pocket like SoftBank (which has really become the Occam's Razor of tech financing).

Go deeper

34 mins ago - Economy & Business

Boeing gets huge 737 Max order from Ryanair, boosting hope for quick rebound

Ryanair low cost airline Boeing 737-800 aircraft as seen over the runway. Photo by Nik Oiko/SOPA Images/LightRocket via Getty Images

Dublin-based Ryanair said it would add 75 more planes to an existing order for Boeing's 737 Max airplanes, a giant vote of confidence as Boeing seeks to revive sales of its best-selling plane after a 20-month safety ban following two fatal crashes.

The big picture: Ryanair's big order, on the heels of breakthrough vaccine news, is also a promising sign that the devastated airline industry might recover from the global pandemic sooner than expected.

Ben Geman, author of Generate
38 mins ago - Energy & Environment

Trump sets auction for Arctic refuge drilling rights before Biden takes office

Photo: Win McNamee/Getty Images

The Interior Department on Thursday said it will auction oil drilling leases in Alaska's Arctic National Wildlife Refuge in early January.

Why it matters: The procedural step would make it harder for President-elect Joe Biden to thwart drilling in the region, even though any actual development is years away.

Rep. Sean Patrick Maloney elected chair of House Democrats' campaign arm

Rep. Sean Patrick Maloney. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Rep. Sean Patrick Maloney (D-N.Y.) on Thursday was elected chair of the Democratic Congressional Campaign Committee for the 2022 cycle, narrowly defeating Rep. Tony Cardenás (D-Calif.) 119 to 107, Politico reports.

Why it matters: Maloney will be tasked with protecting House Democrats' slim majority in 2022 after they underperformed in November's election, losing seats in down-ballot races across the country.