Michael Dell’s Investment Group Drops Position In IHOP, Applebee’s

By mikeandryan [CC BY 2.0], via Wikimedia Commons

In 1998, Michael Dell set up the firm MSD Capital to manage over two-thirds of his net worth. Since MSD Capital took life nearly 15 years ago, Dell Inc. (NASDAQ:DELL)’s net worth has reached $17.5 billion according to Forbes magazine’s most recent wealth accounting of its famed billionaires list. At nearly $18 billion, that makes Michael Dell the world’s 47th richest person.

DineEquity sale

In Monday’s filing, MSD Capital reported that it sold 300,000 shares of DineEquity, which manages the aforementioned restaurants, at no less than $83.51 per share. The filing doesn’t include the purchase price of Dell Inc. (NASDAQ:DELL)’s stake in DineEquity but the sale was valued in the neighborhood of $25 million. The sale is far from a desertion of DineEquity – MSD reported in February that it held 2.3 million shares of the company worth $196.5 million.

Michael Dell moves into music publishing

MSD also reported investing in two automotive-related companies and a hotel investment company along with taking a near 10% position in Kobalt Music Group. The 13 year-old company saw its revenues grow 40% to $175 million in fiscal 2013. While MSD declined to comment on the price for its 9.9% stake in the music publisher, according to sources close to the deal it appears that the $25 million that it sold in DineEquity Inc (NYSE:DIN) was essentially invested in Kobalt.

Traditional music publishers generally take commissions of 50% while paying large advances to new songwriters. Kobalt prides itself in paying smaller advances but only takes commissions of 6% to 15%

Due to the growth of digital outlets, the collection of royalties has become increasingly complex. In the last seven years, the payment lines for a single song has grown by a factor of ten and Kobalt has concentrated its efforts on a sophisticated micropayment tracking system. Music publishing traditionally concentrated on royalty collection for songs played on the radio or in public places, a song’s use on TV or movie soundtracks, along with CDs and downloads. Now, sites like YouTube, though free, have sprung up as a large source of revenue for artists.

In a release, Michael Dell praised Kobalt’s “innovative technology” and added that Dell Inc. (NASDAQ:DELL) would also make its technology services available to the publisher.

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About the Author

Brendan Byrne
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com

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