Just the One Lawsuit? Dell Shareholders Shrug

It's a rare day on Wall Street when news of an attorney general's lawsuit against a company sends its shares soaring.

But that's exactly what happened to Dell Computer today. New York Attorney General Andrew Cuomo sued Dell for deceptive business practices, false advertising and failure to provide promised services.

It sure sounds damaging, but perhaps too many Dell investors have spent time on hold with customer service to care. The stock rose more than 4 percent.

Goldman Sachs analyst Laura Conigliaro said she thinks investors might be pleased the suit wasn't connected to a separate investigation by the S.E.C. into Dell's accounting practices, the Associated Press reports. Evidently Dell investors would rather see two unrelated investigations into Dell than one combined one.

Cuomo's lawsuit breathlessly details allegations that Dell bullied its customers into high interest rate financing deals, told customers who paid for onsite repair that they had to disassemble their own computers, and repaired broken computers with defective parts. Moreover, the suit claims, Dell incorrectly billed customers and then harassed them with calls from collections agents.

Proving intent to deceive might be a challenge for Cuomo, but finding evidence that poor customer service exists at Dell will be a breeze. A quick search finds a receipt from Dell that might get a failing grade from a fourth grade math teacher.

Here's a letter from a customer who claims her life has been a "living nightmare" since she bought her Dell computer. This woman says she had a collections agency after her for billing mistakes she says Dell made.

And here's a story about what goes wrong when a dissatisfied Dell customer also happens to have a platform to vent.

For now, anyway, at least Dell investors are happy.

by Megan Barnett