EMC Corp. (NYSE: EMC), the data storage company that powers much of the digital storage needs for large companies and internet providers, has seen its shares hit a six-year high not because of its own merits, but because it owns so much of software virtualization company VMWare, Inc. (NYSE: VMW).This sounds an awful lot like the LBO situation Seagate Technology (NYSE: STX) found itself in six years ago when the disk drive maker owned a third of the software company Veritas -- and that stake alone was worth double what Seagate itself was worth. If you're a billionaire, opportunities like that present handsome profit potential.
An analyst at Pacific Crest Securities Inc. this week said that EMC may be a takeover target soon due to its majority stake in VMWare, whose shares have tripled since going public less than two months ago. Perhaps IBM, Inc. (NYSE: IBM) or Hewlett-Packard Corp. (NYSE: HPQ) would be interested?
VMWare would be very attractive to a n operating software company due to the nature of the software products it markets, and there are probably more than a few companies that would like to get their hands on its product base. The last time EMC shares were this high was back in July 2001 when shares peaked at over $22.57 each. Right now, shares in VMWare stand at over $107 each.
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Reader Comments (Page 1 of 1)
1. I was in emc at over 100 back in the 90's,
is that a possibilty if a take over occurs/
Posted at 4:40PM on Oct 11th 2007 by frank sicari