46.50 +0.28 (0.61%)
After hours: 6:28PM EST
|Bid||46.50 x 3000|
|Ask||47.48 x 900|
|Day's range||46.17 - 49.19|
|52-week range||44.35 - 70.55|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||9.30|
|Earnings date||26 Feb 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||63.08|
Dell Technologies' (DELL) fourth-quarter fiscal 2020 results are expected to reflect the PC market share gain and the growing HPC clientele despite the overall softness in server market.
(Bloomberg Opinion) -- In the New Hampshire presidential primary, the contest that really mattered was for third place. In the Democrats’ Nevada caucuses on Saturday? Whoever finishes second is likely to get some hype. That’s assuming Bernie Sanders wins. It’s not certain he will, but Nate Silver’s forecast model thinks the Vermont senator has a 3 in 4 chance of doing so. The media rewards surprises, so unless Sanders wins by an unexpectedly large margin, he’s only likely to receive relatively modest amounts of coverage.Second place, on the other hand, is a total toss-up. The polling estimates by FiveThirtyEight find fewer than five percentage points separating Joe Biden, Pete Buttigieg, Elizabeth Warren, Tom Steyer and Amy Klobuchar. They’re close enough that no order of finish among the five of them would be even a mild surprise. And whoever places second in the first state with an ethnically diverse electorate will in fact be a viable contender for the Democratic presidential nomination (unless it’s Steyer, whose overall polling numbers are awful and who has few signs of support from party actors).As for the others, it’s hard to see those finishing sixth, fifth or even fourth having much of a path forward. For Biden, it would mean three consecutive finishes below third. Warren and Klobuchar would be out of the top three in two of the three events so far. And even Buttigieg would look like a candidate without much chance in the primaries in the large, diverse states to come. In the old days, candidates in that kind of shape would almost always drop out. Whether they will this time is an open question. Money is much easier to raise today. Still, we can assume all the candidates are spending what they have, so none of them will be in great shape if the money dries up. For party actors who are concerned about nominating Sanders and about a contested nominating convention, the obvious path is to put pressure on whoever does poorly in Nevada (and then next week in South Carolina) to drop out. That could take the form of public statements by senior party leaders or it could come from behind the scenes.No one has the authority to order losing candidates out of the contest. But Warren, Klobuchar, Buttigieg and Biden are partisan politicians with strong links to the party. They may not feel comfortable opposing the party as a whole. They also are politicians usually rooted in reality, and if the money does dry up they will likely realize the futility of remaining in the race.To be sure: There’s no guarantee that Bernie Sanders won’t capture plenty of the votes that would become available if the field of candidates is winnowed further. But without winnowing, a contested convention would become far more likely, as would the nightmare scenario for the party if Sanders wins a small plurality of the delegates in the primaries and caucuses but gets nowhere near 50%. The truth is the nomination system works — it produces a winner, and usually one with a coalition-style campaign — because candidates without a solid chance drop out. If they don’t, the odds of party-destroying chaos start increasing dramatically.Some weekend reading:1\. William Adler at the Monkey Cage on Trump and the Justice Department.2\. Dan Drezner on Trump’s latest unqualified choice for a top administration position.3\. Augusta Dell'Omo at Made in History on foreign interference in U.S. elections.4\. Nate Silver on Michael Bloomberg’s chances.5\. And my Bloomberg Opinion colleague Noah Smith on poverty.(Disclaimer: Michael Bloomberg is seeking the Democratic presidential nomination. He is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)To contact the author of this story: Jonathan Bernstein at email@example.comTo contact the editor responsible for this story: Katy Roberts at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Dell Technologies (DELL) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Dell Technologies announced today that it was selling legacy security firm RSA for $2.075 billion to a consortium of investors led by Symphony Technology Group. Other investors include Ontario Teachers’ Pension Plan Board and AlpInvest Partners. RSA came to Dell when it bought EMC for $67 billion in 2015.
(Bloomberg) -- Dell Technologies Inc. has sold one of its cybersecurity units, RSA, to a consortium led by Symphony Technology Group, Ontario Teachers’ Pension Plan Board and AlpInvest Partners, part of the computer maker’s efforts to streamline its business.The $2.08 billion all-cash transaction is expected to close in the next six to nine months, the companies said Tuesday in a statement. Bloomberg News reported in November that Round Rock, Texas-based Dell was exploring a sale of RSA.The tech giant has sought to simplify its sprawling empire of hardware, software and security businesses that operate under the Dell Technologies banner, seeking to keep up with changing industry trends and to pay down debt. VMware Inc., the software maker majority-owned by Dell, purchased Pivotal Software Inc. after that company, partially owned by Dell, struggled on the public markets. By selling RSA, Dell is offloading an asset that has had trouble competing with more modern rivals such as Okta Inc.“This is the right long-term strategy for Dell, RSA and our collective customers and partners,” Jeff Clarke, the chief operating officer and vice chairman of Dell, said in the statement. “The transaction will further simplify our business and product portfolio.”As of November, Dell said it had repaid more than $18 billion in gross debt since its EMC Corp. acquisition, announced at $67 billion, closed three years ago and was on target to repay about $5 billion of gross debt in fiscal 2020.To contact the reporter on this story: Nico Grant in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Setting aside the global health implications, Apple Inc. and its suppliers may have gotten lucky with the timing of the coronavirus outbreak.Not only is this low season for iPhone manufacturing, but the supply chain is the most decentralized it has been in a decade.In 2010, when few people had even heard of Foxconn Technology Group, almost all of the Taiwanese company’s production facilities were in Shenzhen in southern China. The former fishing village, just across the border from Hong Kong, had earned the nickname iPod City for the iconic product made there.Then came a spate of suicides among Foxconn workers that brought the global spotlight to the company, the city and the business model of using China’s migrant workforce to supply global markets. By the time Shenzhen found fame, it had become one of the country’s richest cities.Chinese authorities, seeking to spread the wealth and develop the hinterland, had been urging companies like Foxconn to move inland, but they were reticent. The political pressure brought on by the suicides forced Foxconn’s hand, and the following year it shelled out a record $3.2 billion in capital expenditures, setting up shop 1,000 miles (1,600 kilometers) away in Zhengzhou, Henan Province. The great inland migration was underway. But more than that, the decentralization of Foxconn, and with it the global technology supply chain, was to become an irreversible trend. While Zhengzhou became the largest iPhone manufacturing hub, the broader impact of that shift was to ensure that no single site truly dominated electronics assembly. Today, Shenzhen shares the workload of supplying to Apple with more than 30 other manufacturing sites around the country. Foxconn, which operates under its flagship Hon Hai Precision Industry Co., also supplies Apple from plants in Texas and Vietnam. It also has sites in more than a dozen countries including Mexico and the Czech Republic for clients including Dell Inc., Sony Corp. and Microsoft Corp.So while Foxconn announced this week that it would quarantine workers returning to its Zhengzhou facility after the Lunar New Year break once production resumes on Feb. 10, it still has dozens of choices. Not all factories will be immediately equipped to assemble iPhones — some merely make lower-level components — yet the broad array of options means that Apple and Foxconn no longer have all their eggs in the Shenzhen basket. What’s more, China itself is becoming less important to Foxconn, Apple and the broader technology industry. The protectionist policies of Prime Minister Narendra Modi of India have spurred the manufacture of smartphones locally. Beyond the iPhone, which is made in Chennai, Chinese smartphone brand Xiaomi Corp. is among those that are building devices outside of China. Other Taiwan companies — most electronics are made by Taiwanese — have set up shop elsewhere in Asia, with some even bringing production back home.Many blamed, or credited, the U.S.-China trade war spurred by President Donald Trump for companies moving away. That’s only partially true. In reality, dozens of companies had seen the need to reduce reliance on China many years earlier and did so quietly. In fact, by one measure, Foxconn’s China presence peaked eight years ago. Since 2012, its non-current assets in China have declined at least 25%.(1)The biggest winner has been the U.S., which experienced a 10-fold increase in the same figure, mostly due to an influx of investment in 2018 as part of Foxconn’s pledge to expand in America. To be frank, I don’t see iPhones assembled in the U.S. at scale anytime soon, but this decentralization means it’s at least feasible.To be sure, China is still important. In the past decade, more midlevel suppliers such as those that make components like camera lenses and touch-screen sensors are from China. But in many ways this has served to further diversify the supply chain away from the small collection of non-Chinese vendors Apple relied on previously. The result is not only a geographic dilution but a far broader range of vendors for global electronics brands to choose from.As the world grapples with the human and health impact of the Wuhan coronavirus and speculate about its impact on business, the tech supply chain truly is less vulnerable than it has been in the recent past.(1) As of Dec. 31, 2018. Figures for 2019 aren't yet available, but are believed to be lower again.To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- In March, VMware Inc. Chief Executive Officer Pat Gelsinger took the stage at a premier cybersecurity conference to deliver a cutting message to attendees: The industry had failed its customers and many of the companies were akin to ambulance chasers.“We have 6,000 products, 5,000 companies, highly fragmented, (and) not operational,” Gelsinger recalled telling those at the RSA Conference in San Francisco. “We’re the fastest growing line item for IT and the number and scope of breaches has increased.”The reaction: “There were people who wanted to kill me,’’ he said. “There were people who considered me a prophet of the future.”Five months after Gelsinger’s speech, VMware entered the fray, buying cybersecurity company Carbon Black Inc. for $2.1 billion, and joining an estimated 5,600 companies that offer security hardware, software or services. VMware, majority owned by Dell Technologies Inc., and Box Inc. are among the software makers that have targeted the area as the next frontier for growth. Businesses are spending more to protect their information in an era when cyber-attacks have become more frequent and data is moving from corporate servers to huge public cloud-computing vendors.Companies spent $112.7 billion on information security and risk management in 2018, and are projected to increase that outlay almost 9% more per year through 2022, according to research firm Gartner Inc. Still, with the industry so diverse, and so many niche products available, it will be difficult for any new entrant to capture a big share of the business, said Erik Suppiger, an analyst at JMP Securities. “Security is a very specialized technology and it’s difficult to replicate the culture of security innovation at a company that’s not focused on security,” Suppiger said in an interview. “When you have other companies trying to expand beyond their core focus, I think a lot of times they are more successful if it’s adjacent to what they do. It’s when they move beyond a good complement that they get into trouble.”The top public cloud companies, Amazon.com Inc., Microsoft Inc. and Alphabet Inc.’s Google also have started to develop add-on security tools to protect clients’ data on their platforms, suggesting another new, powerful force in the industry.“We haven’t seen them dominating yet, but they are in a very good position,” Suppiger said of the three cloud titans.Despite the market chaos, Gelsinger sees an opportunity for VMware. It plans to integrate Carbon Black’s data-protection product with its existing software and sell them as a suite.“We’re going to redefine the category to say if you’re not a platform and you’re not doing management and security, you’re part of the problem, not part of the solution,” he said.VMware makes software that allows customers to combine multiple tasks on a single server, and is trying to shift to selling more programs that help companies run applications in the cloud and in their own data centers. For years, the 22-year-old company has sought new avenues to boost sales growth, including networking solutions and products that authenticate the identities of those accessing corporate devices and systems.Revenue growth of about 12% year over year for the last four quarters hasn’t matched business cloud applications companies such as Salesforce.com Inc. or Adobe Inc., which regularly post quarterly revenue gains of more than 20%.While no individual companies dominate the market the way former titans McAfee and Symantec once held sway, VMware’s Carbon Black competes with Crowdstrike Inc., a Wall Street favorite since it went public last June. Carbon Black makes software that helps companies detect malicious behavior on their systems. Gelsinger said he considered buying Crowdstrike and others, but dismissed the notion of spending one-third of his company’s $60 billion market capitalization on “one solution.”Instead, VMware is betting it can capture bigger deals by integrating Carbon Black’s tools and selling them through its existing, much-larger salesforce.Suppiger said VMware’s entrance into the market is unlikely to rattle rivals.“I don’t view them as a major threat to the vendor landscape in the endpoint space,” Suppiger said. “There’s a pretty strong case to be made that Crowdstrike is out-executing Carbon Black as part of VMware.”Other companies may emerge as targets for those looking to bolster their positions in the cybersecurity market. Dell is said to be exploring a sale of RSA Security, which it hopes could fetch at least $1 billion, Bloomberg News reported in November. CrowdStrike remains a coveted asset, as is Zscaler Inc., which provides web and mobile security, and analysts have pointed to Palo Alto Networks Inc., though its $24 billion market value makes it an expensive acquisition.Box CEO Aaron Levie, too, sees cybersecurity as a way to expand. His company’s sales growth dropped to less than 20% a quarter in the current fiscal year—far slower than many of its cloud peers.Last October, Box launched a security product, Shield, that’s meant to help companies reduce data leaks through additional controls. The introduction of the new product coincided with activist investor Starboard Value LP taking a stake in the Redwood City, California-based software maker, pushing the company to increase sales growth and make a profit.Box’s future will be determined, in part, on how well it can sell Shield. Levie said he came to believe that a security product would be a natural evolution for the company that sells file-sharing and collaboration tools.In “a world where companies are sharing and collaborating inside and outside of their organizations, you need an all-new security model to protect information that flows between companies,” he said.For all of VMware CEO Gelsinger’s complaints about how fractured the cybersecurity market is, Suppiger still sees the best solutions coming from smaller companies that concentrate on specific problems. But the market remains wide open.“Cloud security is still the wild, wild west where the competitive dynamics have yet to really play out,” Suppiger said.To contact the author of this story: Nico Grant in San Francisco at email@example.comTo contact the editor responsible for this story: Andrew Pollack at firstname.lastname@example.org, Molly SchuetzFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Yahoo Finance chats with Howard Elias, Dell Technologies president of services and digital, and Annette Clayton, Schneider Electric North America CEO, at the 2020 World Economic Forum in Davos about the outlook for economic growth.
Today we'll evaluate Dell Technologies Inc. (NYSE:DELL) to determine whether it could have potential as an investment...
(Bloomberg Opinion) -- Five years ago, in a routine display of trash talking, Tesla Inc.’s Elon Musk made a now infamous quip about how hard it is to manufacture automobiles.“Cars are very complex compared to phones or smartwatches,’’ he told German newspaper Handelsblatt. “You can’t just go to a supplier like Foxconn and say: Build me a car.”He may be proven wrong. Foxconn Technology Group, through its Hon Hai Precision Industry Co. unit, will establish a joint venture with Fiat Chrysler Automobiles NV, the Taiwanese company said in an exchange filing Thursday. While not yet signed, they expect their 50-50 enterprise will “develop and manufacture electric vehicles and engage in IOV (internet of vehicles) business,” referencing a growing ecosystem of connected cars that share location, weather, traffic and vehicle information.Hon Hai would be responsible for design, components and supply chain management, Chairman Young Liu told Debby Wu of Bloomberg News. Foxconn might not actually do final assembly, he said.If you’ve ever visited Foxconn’s global headquarters on the outskirts of Taipei, you’d know that the prospect of the company designing cars is disconcerting. It truly is one of the ugliest office buildings in the world. So let’s hope Fiat Chrysler takes the driver’s seat on that.However, components, supply chain management, and manufacturing are right up Foxconn’s alley. The company makes most of Apple Inc.’s iPhones and iPads, as well as a lot of the electronics that go into cars, including Teslas.Tesla’s then-head of vehicle engineering, Doug Field, whose resume includes Apple and Ford Motor Co., in February 2018 subtly dissed the Foxconn-Apple relationship. “The model at Foxconn was very different” from Tesla, because the Taiwanese company uses manual labor to achieve economies of scale quickly. The iPad is a product “whose simplicity is orders of magnitude below ours.” Field returned to Apple later that year.Let’s agree, cars are indeed more complicated than tablets or smartphones. But I’ll say that there’s no way Elon Musk could churn out half a million handsets per day, consistently, with quality and on time.By contrast, Foxconn, because of the reasons Field outlined, could be well placed to leverage its 40 years of experience in manufacturing, scale and manual processes to get Fiat Chrysler to mass production of electric vehicles quicker than almost anyone in the world. After all, Foxconn’s giant workforce and scale mean it’s the only company that can churn out 5 million iPhones a week at launch every year for the past decade.With scale comes not just cost advantages but supply-chain leverage, an important element when you’re hunting down parts that may be in short stock. Batteries, for example, have been a bottleneck for Tesla deliveries in the past. But when your client list includes Apple, Dell Inc., HP Inc. and a dozen other companies that need batteries by the container, suppliers are likely to put you higher on the priority list. Given that they’re the largest cost of an electric vehicle, solving both the supply problem and then using scale to force costs down could give Foxconn and Fiat Chrysler an edge.Having electric vehicles more readily available and delivered on time might even take the gloss off the cult of Tesla, which is driven in part by the difficulty of getting your hands on one. Yet Fiat Chrysler needs to ensure that Foxconn doesn’t mess it up. It’s known to be domineering in partnerships, with an obsession toward efficiency and cutting costs, rather than value-added branding. Its venture with HMD Global Oyj to revive the Nokia name looked promising until Foxconn executives started pulling rank, overruling those who truly knew how to design and market phones. Many of the talented members of the consortium left and the brand is unlikely to see the revival that many had expected.Sure, Fiat Chrysler is taking a risk by betting on Foxconn. But the U.S.-Italian car company doesn’t have much to lose, and knows that it has little time to waste. Chief Executive Officer Mike Manley is hoping to merge with France’s PSA Group, and told investors in October that electrification could happen on a grand scale after that.It’s also likely to join a self-driving car venture being set up by BMW AG and Daimler AG, Bloomberg reported this month. Such plans necessitate the kind of electric vehicle technologies it doesn’t currently have. Foxconn doesn’t, either, but between them there’s every chance the two companies can develop or acquire what’s needed.If Foxconn really wants to make it in electric vehicles, it will need to learn from Fiat Chrysler the importance of good design, marketing savvy, and brand mystique. In other words, a little bit of Elon Musk.Just not too much.To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Patrick McDowell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Worldwide shipments of personal computers increased 2.3% in the fourth quarter from a year earlier, continuing a 2019 trend fueled by commercial customers upgrading to Microsoft Corp.’s new operating system.Lenovo Group Ltd. held onto the top spot with almost 25% of the market amid a quest by PC makers to find new types of machines to entice customers.PC shipments climbed to 70.6 million units in the period that ended Dec. 31, researcher Gartner Inc. said Monday in a report. Competing firm IDC pegged the shipments at 71.8 million units, a 4.8% rise. For the year, the PC market grew for the first time since 2011, both firms said.For a third consecutive quarter, manufacturers received a boost from corporate clients upgrading devices to get access to Microsoft’s Windows 10 operating system. Microsoft will stop supporting Windows 7 Tuesday, according to the company’s website.With corporate upgrades expected to taper off this year, PC makers have searched for ways to shake up a market that has stagnated for years. Beijing-based Lenovo last week debuted a laptop with a folding screen at the CES consumer technology show in Las Vegas. Dell Technologies Inc. also unveiled two concepts that featured folding screens.“Despite the positivity surrounding 2019, the next twelve to eighteen months will be challenging for traditional PCs as the majority of Windows 10 upgrades will be in the rearview mirror and lingering concerns around component shortages and trade negotiations get ironed out,” said Jitesh Ubrani, research manager for IDC’s Worldwide Mobile Device Trackers. “Although new technologies such as 5G and dual- and folding-screen devices along with an uptake in gaming PCs will provide an uplift, these will take some time to coalesce.”HP Inc. maintained the global No. 2 spot with 22.8% of the market during the quarter. The U.S. company has sought to make its devices more stylish and has also entered the lucrative gaming PC market. Dell was again the third-largest seller, and its 12% year-over-year increase in shipments was the biggest gain of any major manufacturer in the quarter. The company focuses on selling PCs to corporate clients, to bolster profit margins through add-on software and services. Apple Inc. came in fourth place with 7.5% of the worldwide market.To contact the reporter on this story: Nico Grant in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew Pollack, Molly SchuetzFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Microsoft's (MSFT) Surface Laptop 3 is equipped with easy repairability features. This highlights the company's efforts toward making its gadgets more friendly to fixes.
(Bloomberg) -- Dell Technologies Inc. is trying to make its laptops more attractive to iPhone users.The Round Rock, Texas-based computer maker said on Thursday it is releasing software that will let users mirror their iPhone’s screen on Dell laptops.The feature will roll out in coming months as an update to Dell’s Mobile Connect software, which added similar functionality for Android handsets in 2018. The update, will also let Dell users drag photos, videos and other files from their iPhone to their PC. The software requires the download of an iPhone app and works with Dell XPS, Inspiron, Vostro and Alienware laptops running Windows 10.People using Mobile Connect with an iPhone were previously able to get notifications and send texts. Dell said more than 150 million calls and texts have been sent via the software, with half of those happening via Apple Inc. devices.Dell, the third-largest PC maker, sees the software as a way to get more people to buy its products. Apple has offered deep integration between its Mac computers and iPhones for years, including easy file transfers, messaging and calls, but does not offer a screen mirroring feature.To contact the reporter on this story: Mark Gurman in Los Angeles at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Twenty years ago, writing in Fortune magazine, I dubbed the 1990s “the Nasdaq Decade.” And why not? Practically from the moment the browser company Netscape went public, the tech stocks that dominated the Nasdaq stock exchange only went up. Cisco Systems Inc. rose 125,000% in the 1990s. Dell Technologies Inc. was up 72,000%. Shares of EToys quadrupled on their first day of trading in 1999. The Nasdaq itself rose 685%.But a few months after the decade ended, the internet bubble burst, and by 2002 the Nasdaq had declined 78%. The tech highfliers that had soared in the 1990s either went bankrupt or their valuations crashed back to earth.Financially speaking, the 2010s have been characterized by corporate mergers, aggressive activist investors, out-of-control CEO pay and “maximizing shareholder value.” But more than anything, it has been a decade awash in private equity deals. I therefore dub it the private equity decade. And I’ll admit that I’m rooting for private equity to get a comeuppance similar to the one that took place in tech after the Nasdaq decade.Private equity deals have been part of the financial landscape for decades, of course. Who can forget KKR’s $25 billion leveraged buyout (as they were called then) of RJR Nabisco in the late 1980s — a deal memorialized in the classic book “Barbarians at the Gate?” Indeed, some of the biggest private equity deals on record — TXU Energy, First Data, Alltel, Hilton Worldwide — took place in the frothy years before the 2008 financial crisis.What was different in the 2010s was less the size of the deals as their proliferation. In 2009, private equity firms completed 1,927 deals worth $142 billion, according to the financial data firm Pitchbook. By 2018, there were 5,180 private equity deals worth $727 billion.Why so many deals? One reason is more firms are holding more capital than they know what to do with; Bain & Co. recently estimated that private equity firms have a staggering $2 trillion in “dry powder” that they need to deploy. But another reason is that there just aren’t as many big deals available as there used to be, so firms have had to move down the food chain to find companies willing to be bought out. Many, if not most, of the deals in the past few years have been for less than $500 million. I half expect the bodega down the street to be bought out.What has also become clear this decade is the high-minded rationale the private equity industry once used to justify its deals has largely evaporated. You don’t hear much anymore about how taking a company private will remove short-term incentives, impose necessary restructuring, yadda, yadda, yadda.The main thing private equity has done this decade is to pile debt onto companies — imposing repayment costs while pulling out fees and dividends that have no bearing on what the private equity firm has actually done. Famously, Toys “R” Us went bankrupt because it was buried in private equity debt. So did Gymboree, Sports Authority, Linens ’n Things, and many others. In 2017, when the Limited announced it was shutting down its 250 stores — and throwing its employees out of work — the private equity firm that owned it, Sun Capital Partners Inc., reported to investors that it had nearly doubled its money, thanks to the dividends and fees it had paid itself.One private equity skeptic, Daniel Rasmussen, conducted a study to see the effect private equity firms had on the companies they bought. Using a database of 390 deals with more than $700 billion in enterprise value, he found that:In 54 percent of the transactions we examined, revenue growth slowed. In 45 percent, margins contracted. And in 55 percent, capex spending as a percentage of sales declined. Most private equity firms are cutting long-term investments, not increasing them, resulting in slower growth, not faster growth.Instead, he continued, there is a new paradigm for understanding the PE model:As an industry, PE firms take control of businesses to increase debt and redirect spending from capital expenditures and other forms of investment toward paying down that debt. As a result, or in tandem, the growth of the business slows. That is a simple, structural change, not a grand shift in strategy or a change that really requires any expertise in management.In other words, whatever larger purpose private equity might have once had, the 2010s exposed an industry that cared about lining its own pockets — often at the expense of the companies it bought. It has become dealmaking for its own sake.It seems to me that there are two likely consequences for the devolution of private equity in this decade. The first is that when the business cycle finally turns, the consequences for the thousands of companies carrying private equity debt are likely to be severe. As increasing amounts of capital have chased deals this decade, purchase prices have increased drastically. Rasmussen reports that in 2013, private equity deals were done at an average of 8.9 times adjusted earnings. Today, that number has risen to 11 times adjusted earnings. That means the debt loads are becoming heavier.The second consequence is political. If the Democrats take the Senate or the presidency — or both — the private equity model is going to be under sustained attack. Titans like Henry Kravis and Steve Schwarzman will be hauled before Congress and berated for the industry’s practices. Already, Elizabeth Warren has put forth a proposal to rein in private equity — she calls it the “Stop Wall Street Looting Act.” Among other things, it would give workers rights when a bankruptcy takes place and would put private equity firms “on the hook for the debts of companies they buy.”One other thing: In this decade of growing income inequality, nothing symbolized the gap between the haves and the have-nots like private equity. When it can walk away enriched while companies it owns go bankrupt — is that really the way capitalism is supposed to work? Perhaps the 2020s will be the decade when it starts to work for everyone again.To contact the author of this story: Joe Nocera at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.