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   Technology StocksVMware, Inc. (VMW)


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To: Glenn Petersen who wrote (314)1/29/2018 4:01:04 PM
From: Glenn Petersen
   of 345
 
Dell is considering a sale to VMware in what may be tech's biggest deal ever
  • VMware could buy Dell in massive reverse-merger, sources say. Dell currently owns 80 percent of VMware.
  • The deal would give Dell shareholders a way to profit from having taken Dell private in 2013 and help pay off some debt.
  • VMware was the crown jewel of Dell's 2015 acquisition of EMC, but the company's business model is under threat as enterprises move to the cloud.

Alex Sherman | @sherman4949
Published 4 Hours Ago Updated 2 Hours Ago CNBC.com

Dell Technologies could emerge as a public company through a reverse-merger with VMware, the $60 billion cloud computing company it already controls, according to people familiar with the matter.

The reverse merger, whereby VMware would actually buy the larger Dell, would then allow Dell to be traded publicly without going through a formal listing. It would also likely be the biggest deal in tech industry history, giving investors who backed Dell's move to go private in 2013 a way to monetize their deal, while helping Dell pay down some of its approximately $50 billion debt.

VMware's stock fell sharply on the news. At midday, it was down 8.5 percent.

While Dell may also pursue a more traditional initial public offering, said the people, a reverse merger would allow the company to avoid a new public offering. Dell hasn't decided on a strategic option and is also considering several other paths forward, including other acquisitions or buying the remaining stake of VMware it doesn't own, as has been previously reported. Dell is unlikely to sell the company outright or sell its stake in VMware, one of the people said.

VMware was seen as the crown jewel in 2015 when Dell acquired EMC for $67 billion. That gave Dell 80 percent of VMware, which was an early pioneer in a technology called virtualization. That process gave companies a way to run the large computers in their data centers more efficiently by packing multiple "virtual" computers on a single piece of hardware.

While the technique is still widely used, VMware's growth prospects have been tempered as companies have moved more of their infrastructure from their own data centers to large cloud providers like Amazon and Microsoft. In 2016, the company agreed to let customers run its software on arch-rival Amazon's cloud service, an admission that the cloud model is taking precedence.

The reverse-merger is one of the more audacious strategic initiatives being looked at by Dell and its advisers, said the people, who asked not to be named because the discussions are private. Dell's board of directors will meet next month to consider a slew of options, many of which are still in the early stages of examination, including the reverse merger.

If VMware were to buy Dell, VMware would issue shares to Michael Dell and Silver Lake, the private owners of Dell. The owners could then sell shares on the public market as a way of monetizing their investment in Dell, the people said.

The exact valuation of Dell isn't known because the company is private. Dell took itself private in a $24.4 billion deal in 2013. It then acquired EMC for $67 billion in 2015, a deal that still stands as the largest technology acquisition of all time.

Theoretically, a VMware acquisition for Dell would top that, making it the largest technology deal ever. Dell acquired more than 80 percent of VMware when it completed its deal for EMC in 2016. VMware's platform virtualization software was a key reason Dell pursued EMC two years ago.

While VMware's revenue has consistently grown each year, that has slowed. Annual sales rose 6.7 percent in 2016 from 2015 after six consecutive years of double-digit percentage growth. Still, net income of $1.2 billion was an all-time high for the company for 2016, and 2017 full-year estimates suggest the company will top that mark.

Spokespeople for Dell and VMware declined to comment.

cnbc.com

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From: Glenn Petersen3/1/2018 10:43:07 PM
   of 345
 
VMware reports strong Q4 as AWS partnership pays off in hybrid cloud

zdnet.com

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From: Glenn Petersen4/17/2018 10:01:22 AM
   of 345
 
VMware shareholders are winning their battle to block Michael Dell's push for a reverse merger (VMW)

Julie Bort
Business Insider
April 16, 2018


Michael Dell
-----------------------------------

-- VMware shares soared on Monday on word that Michael Dell is ready to abandon his reverse merger plan between VMware and Dell Technologies.

-- Shareholders were in open revolt, and Wall Street analysts were openly negative about the prospect of the deal.

-- Employees weren't thrilled either, and neither were VMware's hardware partners that compete with Dell, according to reports.

-- The deal would have been huge, and would have given Dell a non-traditional path to going public again.

VMware shareholders are happy, and the stock is up about 7% over the close of Friday, thanks to rumors that Michael Dell is growing cold on the idea of a reverse merger — a move that would have made Dell a publicly-traded company again, after it went private in 2013 after a $24 billion buyout.

Dell is listening to angry VMware investors and bearish Wall Street analysts who have been saying that this merger is bad for VMware and only good for Dell, multiple news outlets reported on Monday.

For instance, one of VMware largest investors, Jericho Capital Asset Management, was pressuring the VMware board to end discussions, Bloomberg reported last month.

And T. Rowe Price Group, the largest independent shareholder of VMware, also opposed any such deal, it told Barron's last month.

"The proposed Dell-VMW reverse merger has previously drawn public opposition by VMW shareholders, due to the slow-growth, legacy nature of Dell's core business as well as its heavy debt load," Credit Suisse's Brad Zelnick summarized in a research note on Monday.

On top of that, the merger could have crushed VMware's growth by making it impossible for it to maintain its strong partnerships with Dell's long-time hardware rivals, especially Hewlett-Packard Enterprise, CRN's Mark Haranas reported.

As we previously reported, we heard rumblings that employees inside VMware were not too happy about the idea, as well.

All told, the clear threat was that the reverse merger could lead to investor lawsuits, among other issues.

To recap what everyone was so upset about: Michael Dell's company Dell Technologies is currently VMware's largest shareholder. Dell was considering merging with VMware, essentially selling itself to the smaller company. Because VMware is already a publicly-traded company, it would mean Dell would basically go public without the need for an IPO.

That would also mean that VMware shareholders would suddenly be on the hook for all of Dell's $53 billion in debt (much of which it incurred by buying EMC), Zelnick points out, adding that VMware represents about 10% of Dell revenues but over half if its free cash flow. Under the current structure, where VMware remains an independent publicly traded company, Dell cannot lay its hands on that cash.

In fact, in 2016, EMC executives promised that after it merged with Dell, the combined company wouldn't raid VMware's cash and wouldn't harm its long-term ability to do business with its competitors.

VMware declined to comment.

finance.yahoo.com

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From: JakeStraw4/18/2018 9:00:09 AM
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Carl Icahn buys stake in software provider VMware
finance.yahoo.com

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From: Glenn Petersen8/24/2018 11:54:05 AM
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The second quarter press release: sec.gov

VMware shares slide despite strong Q2 results

The company reported Q2 revenue of $2.17 billion, uppercent year over year.

By Natalie Gagliordi for Between the Lines |
ZDNet
August 23, 2018 -- 20:32 GMT (13:32 PDT)

VMware released second quarter financial results after the bell on Thursday, beating market estimates. The virtualization giant reported a net income of $644 million, or $1.56 per share. The income includes a gain of $231 million from VMware's investment in Pivotal Software, the company said.

Non-GAAP earnings were $1.54 per share on a revenue of $2.17 billion, up 13 percent year over year. Wall Street was looking for earnings of $1.49 per share with revenue of $2.14 billion.

VMware's license revenue came to $900 million, an increase of 19 percent year over year. Services revenue was $1.2 billion.

In statement, CFO Zane Rowe said the quarter was driven by "strong operational performance across the business. Product license bookings grew double-digits year-over-year in all major product categories."

In terms of guidance, analysts expect VMware to report Q3 earnings of $1.49 per share on revenue of $2.16 billion. Shares of VMware were down almost four percent after hours.

zdnet.com

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From: Glenn Petersen8/27/2018 4:47:41 PM
   of 345
 
h/t JakeStraw

Amazon deepens its partnership with VMware to go after companies that don't use the cloud

  • The new software will support databases from companies like Microsoft and Oracle.
  • Hundreds of VMware customers are using VMware's technology on Amazon's cloud.
  • Amazon and VMware first announced their cloud partnership in 2016.
Jordan Novet | @jordannovet
Published 4 Hours Ago Updated 3 Hours Ago CNBC.com


Bloomberg | Getty Images
Andy Jassy, CEO of Amazon Web Services, speaks at the AWS Summit in San Francisco on April 19, 2017.`
-------------------------------------------

Amazon Web Services has emerged as a dominant force in cloud computing by hosting other companies' technology infrastructure in its massive data centers. But AWS is also rolling out services for companies that do it the old way.

On Monday, Amazon and VMware introduced a version of Amazon's cloud-based database management software that's meant for companies that still use on-premises data centers.

The announcement at VMware's VMworld conference in Las Vegas is the latest example of Amazon's shift in strategy to support corporate computing outside its own facilities, even as more business moves to the cloud, where AWS is the market leader. The move strengthens AWS' so-called hybrid-cloud offerings against rivals Microsoft, Google and IBM.

The software, which will be available in the next few months, is designed to make it easier for network administrators to run their databases across more servers, regardless of whether those machines are stored in house or hosted by Amazon. The product — Amazon Relational Database Service on VMware — supports popular databases from Microsoft and Oracle, as well as open-source options like MariaDB.

Amazon and VMware started working together on a combination of cloud and on-premises technology in October 2016. The partnership is helpful for systems administrators who are familiar with VMware and want to take advantage of cloud.

VMware shares have more than doubled since that deal was announced
. The company has rolled out several updates, and hundreds of VMware customers are using its technology on AWS, VMware CEO Pat Gelsinger said on the company's quarterly earnings call on Thursday.

The new technology could pose a threat to Microsoft's Azure Stack, on-premises software tools that mirror what's available in the company's Azure public cloud.

"Amazon reps today, when they hear Azure Stack, they bring in VMware Cloud on AWS," Sanjay Poonen, VMware's chief operating officer, told CNBC last week. "The partnership with VMware is the best alternative to Azure Stack."

It could also represent a new challenge to Oracle, which operates its own public cloud. Amazon has been working to move off of Oracle's database software entirely.

Gelsinger has told analysts that VMware's work with AWS would not result in a material amount of revenue this year. Stifel analysts wrote in a note last week that they don't expect material revenue from VMware on AWS until at least VMware's 2020 fiscal year, which begins in April 2019.

cnbc.com

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From: JakeStraw9/7/2018 3:07:42 PM
   of 345
 
Edited Transcript of VMW earnings conference call or presentation 23-Aug-18
finance.yahoo.com

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From: JakeStraw11/6/2018 12:08:28 PM
   of 345
 
VMware acquires Heptio, the startup founded by 2 co-founders of Kubernetes
techcrunch.com

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From: Glenn Petersen12/28/2018 12:01:38 PM
   of 345
 
VMware to pay previously announced one-time special dividend on Dec. 28

By Ciara Linnane
MarketWatch
Published: Dec 28, 2018 7:49 a.m. ET

Enterprise software company VMware Inc. VMW, +1.61% said Friday it will pay its previously announced one-time special dividend on December 28. The company will make the $11 billion payment to shareholders of record as of close of business on Dec. 27. It expects that 60.39% of the dividend will be treated as a taxable dividend for U.S. federal tax purposes, with the remainder being treated first as a return on capital and then as a capital gain. Shares were slightly higher premarket and have gained 23% in 2018, while the S&P 500 SPX, +0.27% has fallen 6.9%.

marketwatch.com

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From: Glenn Petersen1/1/2019 11:49:30 AM
   of 345
 
Here's What's Going On With VMware and Dell Today

VMware is down big after paying a massive special dividend, Dell is a publicly trading company again, and the tracking stock is no more.

Timothy Green
Motley Fool
Dec 31, 2018 at 2:46PM

What happened

Dell Technologies completed its journey back to the public markets last Friday by acquiring all outstanding Dell Technologies Class V ( NYSE:DVMT) stock. The transaction also involved VMware ( NYSE:VMW), which Dell controls with a roughly 80% stake. VMware paid shareholders a one-time $11 billion dividend on Friday as part of the deal, with most of that payout going to Dell.

Shares of Dell were up about 3.4% at 1:30 p.m. EST, while the Class V shares are no longer trading. Shares of VMware were down 14.3% from Friday's close, reflecting the payment of the special dividend. Today is the ex-dividend date. Adjusted for the special dividend, VMware stock was up about 3%.



source: Dell.
__________________

So what

The Dell Class V stock was a tracking stock intended to track the performance of Dell's stake in VMware. The stock was originally issued as part of Dell's deal to acquire EMC, which closed in 2016. EMC owned 81% of VMware prior to being acquired by Dell.

Dell successfully exchanged a mix of cash and new Class C shares for all outstanding Class V shares on Friday. The company paid $14 billion in cash and issued nearly 150 million Class C shares to retire the tracking stock. The move greatly simplifies Dell's corporate structure, and it brought Dell back to the public markets without the need for a public offering.

Class V shareholders had the option to receive either $120 in cash or 1.8066 Class C shares for each Class V share, up to a $14 billion aggregate cash limit. More than 90% of shareholders chose the cash option, with the rest picking the share option. Because the cash limit was exceeded, shareholders who opted for cash will receive a portion of their payment in Class C stock. The cash option was the smart move, with shares of the Class C stock currently trading for around $47 per share.

As part of the transaction, VMware paid a one-time special dividend totaling $11 billion. The dividend is payable to shareholders of record at the close of business on Dec. 27, with a payment date of Dec. 28. Dec. 31 is the ex-dividend date. The $11 billion payment works out to $26.81 per share.

"Dell Technologies was created to be the essential infrastructure company for this digital era, and with today's announcement, we are aligning the interests of our stakeholders to benefit from the integrated innovations and value creation from across our entire family of businesses," said Dell CEO Michael Dell in the press release announcing the completion of the transaction.

Now what

With the tracking stock gone and Dell back in the public markets, investors can now bet on the company as a whole, not just on its stake in VMware. Dell's revenue has been growing briskly, with 15% year-over-year growth in its fiscal third quarter. But the company is still saddled with a substantial amount of debt. As of Nov. 29, Dell had about $48.7 billion of debt and $17.5 billion in cash. The dividend received from VMware will pay for part of the cash portion of the tracking stock purchase.

VMware now has quite a bit less cash after paying the one-time dividend. Total cash as of Nov. 29 was $13.5 billion, along with about $4 billion of debt. This deal will make VMware's balance sheet a lot weaker.

After going private in 2013 and creating its complex share structure a few years later to finance the EMC deal, Dell has undone those moves and is once again a public company. How it all works out this time around remains to be seen.

fool.com

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