8-KSecurities & Listing

Dell Technologies Inc. 8-K Report, Unregistered Securities Sale (Dec 5, 2023)

Filed December 5, 2023For Securities:DELL

Summary

This 8-K filing from Dell Technologies Inc. (DELL) reports on the conversion of Class A common stock held by Michael S. Dell and the Susan Lieberman Dell Separate Property Trust into Class C common stock. A total of 25,000,000 shares were converted on a one-to-one basis. This conversion is a precursor to anticipated charitable donations of the Class C shares by Mr. Dell and the Trust. This event is notable as it involves the CEO and a significant trust associated with him converting a substantial block of shares. While the conversion itself does not alter the total number of shares outstanding or the economic rights of the shares (dividends and liquidation), it facilitates future philanthropic activities. Investors should note this is a non-sale transaction and part of a pre-planned strategy by the company's leadership for charitable purposes.

Key Highlights

  • 1Michael S. Dell and the Susan Lieberman Dell Separate Property Trust converted a total of 25,000,000 shares of Class A common stock into Class C common stock.
  • 2The conversion occurred on a one-to-one basis, meaning 22,500,000 Class A shares from Mr. Dell and 2,500,000 Class A shares from the Trust became Class C shares.
  • 3The primary purpose of this conversion is to facilitate future charitable donations of the Class C shares by Mr. Dell and the Trust.
  • 4The shares were issued without registration under the Securities Act of 1933, in reliance on Section 3(a)(9) exemption for securities exchanged by the issuer.
  • 5Class C common stock carries the same dividend and liquidation rights as Class A common stock.
  • 6This transaction is a conversion, not a sale of shares, and does not immediately impact the total number of shares outstanding or the ownership structure in a way that suggests a change in control or a new equity issuance to the public.

Frequently Asked Questions

Dell Technologies Inc. filed an 8-K to report that Michael S. Dell, Chairman and CEO, and the Susan Lieberman Dell Separate Property Trust converted a total of 25,000,000 shares of Class A common stock into 25,000,000 shares of Class C common stock. This conversion was done to prepare for future charitable donations.

No, this is a conversion transaction, not a new issuance of shares to the public or a sale. The total number of shares outstanding and the economic rights (like dividends and liquidation preferences) of the converted shares remain the same. Therefore, it does not directly impact the company's financial health or create new equity dilution for existing shareholders.

Mr. Dell and the Trust converted their Class A shares to Class C shares in anticipation of making future charitable donations using these Class C shares. The Class C shares are more easily transferable for such purposes under the company's structure.

The shares were issued without registration under the Securities Act of 1933, relying on the exemption provided by Section 3(a)(9) of the Act. This exemption applies when an issuer exchanges its own securities for other of its own securities.