The news at a glance
Microsoft may back Dell buyout; Wavering under pressure; Blockbuster to close 300 stores; Atari files for bankruptcy; Dreamliner probe drags on
Computers: Microsoft may back Dell buyoutAn effort to take beleaguered computer-maker Dell private “has gained a prominent, if unusual, backer: Microsoft,” said Michael J. de la Mercedand Nick Wingfield in The New York Times. Sources said the software giant was in talks to contribute $2 billion to help finance a takeover of the Texas-based manufacturer. Founder Michael Dell and private-equity firm Silver Lake Partners are reportedly planning a $20 billion–plus bid to buy the company back from public stockholders and have been searching for “a deep-pocketed investor”; Microsoft, with $66 billion in cash on hand, fits that bill.
If Microsoft follows through, it would have “one of the largest ownership interests in a private Dell,” said Anupreeta Das, Shira Ovide, and Ben Worthen in The Wall Street Journal. The software company would not be involved in Dell’s day-to-day operations, “but Dell would agree to use Microsoft’s Windows software to power the vast majority of its devices.” Observers said the possible deal is in line with Microsoft’s efforts to gain influence over the design and strategy of hardware that runs its products. “I think Microsoft has identified this as an issue and is trying to have more say in its destiny,” said analyst Al Hilwa.
Fed: Wavering under pressure Federal Reserve officials underestimated the crisis facing American financial markets in 2007, said Binyamin Appelbaum in The New York Times. More than a thousand pages of newly released transcripts show that just three days before the housing bubble burst, key officials had “misgivings about the need for action” and were “deeply complacent” about the perilous state of the housing market. In August of that year, St. Louis Fed President William Poole told his colleagues, “My own bet is the financial market upset is not going to change fundamentally what’s going on in the real economy.”
Retail: Blockbuster to close 300 stores Dish Network Corp. plans to shutter 300 Blockbuster stores across the country, said Frank Shyong in the Los Angeles Times. The mass closings will thin “the once ubiquitous video rental chain’s bricks-and-mortar presence,” and may result in the loss of almost 3,000 jobs. Dish acquired Blockbuster and its roughly 1,700 stores in a 2011 bankruptcy sale, hoping to use the chain’s brand to market its online streaming service. A spokesman said Dish continues “to see value in the Blockbuster brand” and will analyze profitability on a store-by-store basis.
Tech: Atari files for bankruptcy The company that created some of the most popular early video games in the 1980s is going under, said Hayley Tsukayama in The Washington Post. Atari announced that it had filed for bankruptcy in the U.S., saying it was “starved for funds and unable to finance” continued growth. Its French parent company, Atari SA, has not posted a profit since 1999, and has also filed for bankruptcy in France. “[We] have decided to take what we think is the best decision to protect the company and its shareholders,” said CEO Jim Wilson.
Airlines: Dreamliner probe drags on Fixing Boeing’s jinxed Dreamliner could take months, said Melissa Gray and Thom Patterson in CNN.com. Transportation officials are still investigating the cause of two fires that led to the global grounding of Boeing 787s. Early reports said onboard lithium-ion batteries tended to overheat when overcharged, but the National Transportation Safety Board said that did not happen aboard the jet that caught fire in Boston last month. The finding “doesn’t bode as well for a quick fix as Boeing would have liked,” said John Goglia, a former NTSB member.