Trend: Dell's stock price may be reflecting some ugly information about faulty PCs revealed in a lawsuit.
More unpleasant news about bad corporate behavior. I heard from many sources that Dell PCs seemed to have far more problems in recent years than in their glory years. Now I know why.
Jim Hightower summarizes "Dell Accused Of Hiding Evidence," The New York Times, August 13, 2010":
Take the case of corporate betrayal that Advanced Internet Technologies has brought against Dell, the giant computer corporation. Now in its third year of litigation, AIT's lawsuit accuses Dell of selling at least 11.8 million faulty PCs to business customers, then engaging in a companywide coverup of the problems.
Earlier in the case, it was revealed that Dell's rank-and-file employees knew that the corporation was churning out PCs that were likely to break down, and AIT unearthed an internal email showing that CEO Michael Dell himself was informed of both the flaw and the effort to hide it from investors, customers, and the media. Of course, the email didn't stop the computers from malfunctioning at an unprecedented rate, and angry customers grew angrier as Dell kept dodging its responsibility for fixing the machines. Amazingly, the PC peddler even tried to stiff the law firm it had hired to battle AIT's lawsuit! The firm had 1,000 of Dell's dicey computers, and the company was refusing to fix them until the law firm threatened to sue its own client. Not even "Law & Order" would come up with a plot twist that perverse.
Yet, in another twist, it now appears that Dell has deliberately violated a court order to release internal emails written by top executives, including Michael Dell. Rather than providing the full texts, the corporation only delivered a few snippets that look to be altered and incomplete.
So, with added accusations of evidence tampering, it seems that Dell itself is slowly twisting in the legal wind.
Dell's hubris boomerangs: On October 6, 1997, in a Gartner Symposium, when Michael Dell was asked what he would do if he owned then-troubled Apple Computer, he said "I'd shut it down and give the money back to the shareholders."
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