Carl Icahn has invested in 100 million shares in Dell and says he wants the outfit to conduct a leveraged recapitalisation.
The move is being seen by Wall Street as tossing a spanner into Dell's cunning plan to go private.
According to Reuters, Icahn has accumulated a stake in Dell representing six percent of the company.
This would make him the next largest shareholder after Southeastern Asset Management.
Icahn is famous for buying companies and giving the management a good shake up. He wants Dell to take on debt of as much as $9 billion and pay out a special dividend to shareholders. It is likely that he will oppose Dell's buy-out plans too.
Dell has done a deal with Silver Lake and Microsoft to buy the outfit for $24.4 billion. But the deal is being opposed by some of Dell's major shareholders, including Southeastern Asset Management, which said the deal substantially undervalued the company.
Southeastern is thinking about teaming up with another firm to attempt a counter bid to Michael Dell's deal and has demanded that Michael open his books, signaling it could become more active in opposing the offer.
A special committee of Dell's board of directors ruled that the pending sale of the PC maker was the best alternative for shareholders.
Icahn's recent battles include an effort to take over truck and military vehicle OshKosh which did not come off, and campaigning for a higher dividend payout from oil services firm Transocean.
Icahn bought a 10 percent stake in Netflix in September claiming that there were interested buyers for the movie streaming service waiting in the wings. These did not appear.
If he says no to the plan to go private Michael Dell might have to scrap the plan, or come up with more cash from somewhere to pay off shareholders. Meanwhile, the Wall Street Journal is suggesting that HP contemplated putting a bid in for Dell.