Dell Technologies Share Price Forecast November 2021 – Time to Buy DELL?

Shares of American multinational technology company Dell Technologies (NYSE: DELL) are in the red today, after closing at $54.61 with a downtrend of -51.03% as of November 2^nd (19:59 EDT). Dell’s shareholders are looking forward to the tax-free spinoff of Dell’s 80.6% stake in VMware. The shares have already performed well in 2021, increasing by more than 40% because of the news.

Dell Technologies – Technical Analysis

According to the financial statement released by Dell Technologies, the market cap of the company is at $85.318 billion with total assets worth $122.678 billion. Revenue for 2020 was at $94.33 billion with a profit margin of 3.45% compared to $91.93 billion in 2019.

Moving averages such as Exponential Moving Average (10)(55.61), Simple Moving Average (10)(56.20),  Exponential Moving Average (20)(55.01) and Simple Moving Average (20)(55.04) are indicating a sell action. On the other hand, oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(18.39),  Williams Percent Range (14)(−66.47),  Bull Bear Power(−0.59) and Ultimate Oscillator (7, 14, 28)(43.58) are neutral.

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Recent Developments

Dell Technologies has created an independent software company worth $64 billion by shedding its 81 percent stake in VMWare to its shareholders. The company wiwll start paying dividends and end its multi-class share structure in a move to appeal to a larger group of investors. VMWare’s $11.5 billion special cash dividend has enticed a huge number of Dell’s investors and shareholders. The total number of VMware shares(common stock outstanding) was 419662495 as of October 29^th, 2021.

According to statements from the company, Dell has fixed the final distribution ratio for the special dividend of its shares of VMware Class A common stock and Class B common stock at .440626. This means each Dell shareholder is entitled to approximately 0.44 shares of VMware Class A common stock for each share of Dell Technologies common stock held as of October 29^th, 5 pm. VMware Class B common stock will be converted into VMware Class A common stock on a 1:1 ratio. Dell shareholders will be entitled to cash in lieu of any fractional shares of VMware Class A common stock.

Currently, the single largest shareholder of VMware Dell Technologies is Michael Dell, the founder, chairman and CEO now own approximately a 41 percent stake in VMware. Silver Lake, Dell’s private equity partner, now holds approximately an 11 percent share in VMware. Together they now own 52% of VMware.

Should I Buy DELL Shares?

After the spinoff, each shareholder of Dell had their values almost halved to just over $55 per share. On the other hand, they also hold shares of VMware worth a bit less than $129 each. After the spinoff, the company’s Infrastructure Solutions Group and Client Solutions Group will be the sole sources of consolidated revenue. These two segments account for more than 80% of revenues prior to the spin-off. It consists of revenues from computing hardware/software sales and data center infrastructure.

Dell’s core businesses, which consist of portable workstations to support increasingly virtual collaborations in the post-pandemic era and next-generation data storage infrastructure to support multi-cloud and big data solutions, are well-positioned for long-term growth opportunities. It remains the undisputed leader in the global market, which will be reflected through the significant upside potential of the shares.

Based on Dell’s upcoming quarter results announcement, and the ongoing supply constraints that are expected to hamper the biggest sales quarter of the year, any type of positive sentiment among investors could potentially increase the stock’s valuation by 30% over the next 12 months. That being said, you should probably not buy DELL shares at this point and just add them to your watchlist for the time being.

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