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VMware, Inc. (VMW)

NYSE - NYSE Delayed price. Currency in USD
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156.39+4.03 (+2.65%)
At close: 4:00PM EDT
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  • j
    jerry
    @Jonathon, The problem with the $2B repurchase program is again you are pushing the stock price up for Michael Dell and Silver Lake to get more VMW shares. Michael Dell is ahead of the board so he wants to make sure the stock price goes up high enough so they get more free shares of VMW. As far as VMW shareholders the price will drop roughly $30 after the dividend is paid out. VMW sharesholders basically get nothing for this deal except they have to pay taxes on the dividend. I dont understand the 2 Billion buyback it is basically Michael Dell pushing to get the VMW stock price up inflated on its on fighting the shorts right now. This again is basically taking more cash from VMW to super-inflate more more going to Dell. I am just hoping VMW sharesholders can see what is truly going on. They are better to sit on the sideline unless you are intersted in supporting Uncle Sam? Does anyone else see what I am seeing about the additional money trying to ignite investors to buy VMW. It will not happen on November 1st. I predict there will be a delay. Michael Dell and Silver Lake need the stock to go up higher so they get more free cash or should I say VMW stock to sell after the deal is finished. Thoughts?
  • J
    Jonatan
    New SEC filing:
    1. new $2B stock repurchase
    2. date of special dividend is (probably) Nov 1st
    3. special dividend is fixed at $11.5B (that's the lower end of the range given on Apr 14th)

    Hopefully, (1) drives $VMW higher short term, similar to the effect of stock repurchase announcement on $DELL a couple of weeks back (Sep 23rd IIRC?).
    Also, the early date in (2) should put pressure on shorts. I believe they will have to pay a huge dividend for the stocks borrowed. (Can someone confirm?).
    Yahoo indicates there was a big jump in shorts: shorts are now 20.21% of float, which is up 18.5% (from Aug 13 to Sep 15). That's probably related to the unusual higher amount of sells in early Sep.
    Clearly, paying less dividend is good for $VMW, hence (3) is better than the $12B estimate from April.

    Obviously, none of this is any official financial advice. Do your own research. Etc etc. But IMHO, short term looks great. Hold your fingers crossed.

    Ref: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001124610/000112461021000056/vmw-20211007.htm
  • j
    jerry
    I see the value of VMW stock at $130 and you are in the negative paying taxes on the Dell Spin-off dividend. VMW boasts if it makes it to $160 with an unconfirmed spin-off date via delays you are at actually $130. No 8k from the SEC for VMW & Dell Shareholders. Uncle Sam wins. Rely on the facts and research this deal. Refer to PK below that Michael Dell and Silver Lake are the only Winners. I do not see the hype for VMW shareholders. VMW cash flow will pretty much be gone for the next 3 - 5 years. Stagnation for the stock with so much money tied up (Mega Billions paid out to Dell to become a free company in debt). I would also be concerned about the latest quarterly results that WS is very concerned about in regards to how the numbers do not add up. Very low margins for some of VMW's flagship products. It is if they are selling products for free to absorb market share at a serious cost, which they cannot do with no free cash flow anymore. A company going nowhere for the next 3 - 5 years and accounting will be exposed as well. I do not think anyone has been able to figure out last quarters numbers, which look questionable. What are they possibly hiding with accounting? I see too many concerns holding this stock. The CEO is very loose with his words out in public as well. I was not impressed with last quarters earnings call, the CEO was rambling on like he was reading a script.
  • W
    William
    From Dell 8K On September 23, 2021, Dell Technologies Inc. ("Dell") received a favorable private letter ruling from the U.S. Internal Revenue Service, which confirmed the tax-free status of its planned spin-off of VMware, Inc
    To close in early Nov. pending certain unnamed conditions
  • w
    wilford
    Conference Call today at 4:00 ET. w
    top management.
    should b helpful
  • S
    Sunday
    Please when is the company paying the special dividend? Thanks
  • W
    William
    High amount of short interest is fuel. Will those shorts have to pay the special dividend on their short shares ? IMO that is a, YES. I believe few shares will be available at ex dividend price. Squeeze.
  • N
    Nate
    Citigroup analyst on September 20th: VMWare price target $190.
  • j
    jerry
    Can someone explain the VMW & Dell deal for VMWare shareholders so the real facts are out in-front for investors to make an informed decision? From my understanding for VMWare shareholders it equates to taxable income when the dividend is paid out, which is not good. The other part of the equation is the next day after the deal is done the exact amount of dividend money paid out VMW stock will go down the equivalent payout amount, which is a wash from a stock price perspective. You actually lose money because of paying Uncle Sam taxes (Uncle Sam wins again). I am not interested myself in more taxable income without any gain so what is the hype? I can see Dell shareholders getting the better deal. Can someone explain otherwise? Also, remember in regards to the recent small run-up the CEO is out campaigning with some very lose words. I do believe VMW is buying back shares in tandem with the new CEO lose words campaign, which could equate to the stock going up the small amount this past week. I would be very careful to make sure you understand the question mark surrounding the Dell deal and what is going on behind the scenes. Why do you think there is not a firm definitive date mentioned for the spin-off as of yet?
  • j
    jerry
    There are rumors floating around that IBM is interested in acquiring Nutanix based upon the Hybrid Cloud Hyper-convergence open Eco-system that ties well with Redhat's future roadmap.
  • J
    Jim
    This is a continued climb to $160 by next ER in anticipation of a dividend effectively in the 15-18% range
  • N
    Nate
    As per Dividend Sensei - Author of The Dividend Kings:

    2021 average fair value: $191.27
    2022 average fair value: $207.60
  • J
    Jim
    Might we have a nice pre-spinoff run-up in addition to a big ol' fat dividend? That would be very satisfying to me!
  • j
    jerry
    I see the VMW CEO campaigning with many strong words trying to push VMW stock in the short term. I would be careful listening to possible misinformation campaigns of promises versus what is really going on for the future of VMW with investor risk. The CEO speaks of all of the money that will be available to make all of these new deals. I see the exact opposite with VMW possibly losing its investor grade rating due to all of its cash for the next 3 - 5 years paying for the Dell deal. Stagnation I foresee. I also hear many of the Channel partners speaking about VMW losing its Mojo. I would wait a few quarters to let this all play out. I am very concerned that VMW postponed finalizing the Dell deal until November. I have still not heard any terms about a firm date for the close of the Dell deal. They postponed to late November and it could be even longer based off the price of VMW stock.
  • W
    William
    Oct. 7 event Financial Analyst Meeting
    A live webcast will be available on VMware’s Investor Relations page at http://ir.vmware.com. The replay of the webcast will be available for two months.
    Product and strategy discussion.

    About VMware
    VMware - Overview
    ir.vmware.com.
  • W
    William
    Morningstar October 08, 2021 report by analysis Mark Cash is a well done in detail review of all aspects of VMW past, present, and future. It is available at the bottom of Yahoo chart page for VMW's stock.
  • J
    John
    I disappeared when Palantir went DPO. What's the playbook here? Buy the dip, grab the dividend, ride the dip and break even? Is a retest of $200 possible?
  • G
    GreenHenry
    $NTNX conversation
    I was skeptical of this quarter's earnings after I realized that $NTNX was reporting after $VMW.
    Now, I feel this earning is implying "Get used to winning more regularly.". :)
  • T
    T
    WOW, you would have thought their cloud business contracted, but know it went up 23%

    "License revenue, from the company’s traditional on premise software business,- was $738 million, up 3%, and ahead of the Street consensus forecast of $699 million. But subscription and software-as-a-service revenue—basically the company’s cloud business—was $776 million, up 23%, but below the Street consensus call for $790 million"

    It's not like VMW is seeing sales decline. What an over reaction. Last year their cloud business was $631M and they grew it by $145M - -> 23%. The street wanted $156M growth or 24.7%.............Ooooooo the horror of such a huge miss....

    Give me a break especially when you consider they beat eps by 6.7% $1.75 vs. $1.64.

    And the CEO/CFO said it was largely Asian customers being a bit more cautious and wanted to stay on premise. I get the cloud business is preferred, but they beat earnings by 0.11 and came in at $1.74.

    Their 2021 forward P/E is now 21.
  • R
    Richard
    If I have covered calls on $VMW that extend past the special dividend date, does the strike price change to reflect the dividend or does the call just lose intrinsic value? TIA