Eagle Eye Opener

Eagle Eye Opener: Blackstone Bails on Dell Deal; Italy’s Parliament Tries again to Elect New President

Blackstone Decides Dell Deal Done (Bloomberg)

Tech investors should take note this morning that a big portion of the potential Dell, Inc. buyout deal is done.  Blackstone Group LP has pulled out of the mix for purchasing Dell, Inc. due to concerns about the company’s finances and the shrinking personal computer (PC) market.  As the due diligence process dragged on in the first quarter of 2013, Blackstone analysts couldn’t miss waning PC sales reports.  So that, along with Dell’s financials, sort of sealed the deal or lack of a deal. According to Alberto Moel, a tech analyst for Sanford C. Bertstein & Co, “Dell is facing downward pressure on PCs, shrinking margins and lower cash flow, and that’s the last thing you want in a leveraged buyout.” For Blackstone, it certainly was.

Will the Third Time Be a Charm for Italian Election (CNBC)

Europe’s economic future is still on hold as Italy slowly rolls toward an eventual presidential election winner. Italy’s Parliament representatives will return today for a third attempt to resolve the country’s presidential election deadlock.  Currently, Romano Prodi seems to be in the lead, as Pier Luigi Bersani has reversed ground and said that he would now back a Prodi presidency. Unfortunately for Italy’s political future, Silveio Berlusconi has stated he’ll force new elections if Prodi wins the election. This stalemate has gone on for weeks now, and continues to pump more uncertainty into an already unclear situation regarding European economics. Once the election has finally been decided, the country can return to facing its enormous financial crisis.

EU-US Free Trade Agreement in the Works… Needed ASAP (Reuters)

As unlikely as it may seem, there is some good news coming out of economically struggling Europe this morning.  It appears that the European Union and the United States are finally ready to begin negotiations for their own Free Trade Agreement.  With talks set to begin in June, it’s the feeling on both sides that the sooner the deal is done, the sooner economies on both sides will get a boost.  According to a report from the European Commission, the agreement could add .5 percent to Europe’s gross domestic product (GDP) and .5 percent to the United States’ GDP — that’s no small amount in either case. In addition, it would stimulate job creation on both sides of the Atlantic Ocean. The question is, can either side wait the two years that one report claims will be needed for the deal to be consummated? Probably, but at what cost?

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