Dell's Wasted Billions Explain Fuzzy Math on Deal: Street Whispers

Updated to include details about buyout terms from Dell filing

NEW YORK (TheStreet) -- Skeptics of Dell's(DELL) leveraged buyout might be at a loss to understand how the math adds up in the proposed $24.4 billion takeover deal, the largest since the financial crisis.

Still, few investors or analysts appear to be concerned that the debt-fueled buyout of Dell by a consortium led by founder Michael Dell, private equity firm Silver Lake Partners and Microsoft(MSFT) will fall through, even amid concern the $13.65-a-share cash offer provides a light payout to current shareholders.

Those who are staring at their calculators and remain mystified by the $16 billion in financing needed to complete the takeover and increasing signs that Dell's debt could be downgraded to junk by Standard & Poor's, Moody's and Fitch Ratings may simply be underestimating the amount of shareholder-value destruction at the PC maker in recent years.

Simply not wasting billions in investor money may go a long way in financing Dell's mega leveraged buyout. In fact, Dell hints at that scenario in an 8-K filing with the Securities and Exchange Commission that was appended to Tuesday's deal.

Notably, Dell indicates in its filing that cash outflows from financing activities at the Round Rock, Texas-based company might not increase in the wake of the take-private deal, in spite of about $13.75 billion in takeover loans and a $2 billion debt-financing commitment from software maker Microsoft, according to a separate Wednesday filing.