Fidelity Tech Fund Ditched Dell Shares: Filing

a filing with the U.S. Securities and Exchange Commission

The revelation by the Fidelity Advisor Series VII Technology Fund, made in a filing this week, said the investment firm ditched all of its holdings in Dell, Round Rock, Tex., by July 31 -- just weeks before Dell reported disappointing quarterly earnings and that it was under investigation by the SEC.

Charlie Chai, portfolio manager for the technology fund, wrote in a note included in the filing that a decision to limit holdings of Dell and chipmaker Intel, Santa Clara, Calif., helped prevent extended losses during the six month period that ended July 31.

"Both index components did poorly, and the fund was rewarded for underweighting them," Chai wrote. "In Dell's case, I sold the entire position by period end." The revelation adds more background to the pressure Dell's top executives were under as their most recent quarter came to an end.

Not only was the PC maker battling a declining stock price, but it reported a precipitous decline in revenue growth for the period and that its profitability dropped by about 50 percent compared to the same period a year earlier. It also announced it was under investigation by the SEC, the Audit Committee of its own Board of Directors and, last month, said federal prosecutors from New York had subpoenaed Dell financial documents dating back to 2002.

NASDAQ has also sent Dell a notice, saying the company faced de-listing from its stock market because the PC maker is delinquent in filing its mandatory quarterly report with the SEC.

Since last month, though, shares of Dell stock have actually increased by more than 12 percent . And other recent filings show that in May, while Fidelity was ditching its shares of Dell, company founder and Chairman Michael Dell bought $70 million worth of his company's stock on the open market.