Skip to main content

EMC undervalued? Not quite

Barron's Online came out with an August 20 article titled "An Unloved Store of Value" contending investors don't fully appreciate the value VMWare provides to EMC. At $18, the stock was undervalued the article contends, "EMC will benefit directly from VMWare's rising profits and will also enjoy gains in sales of storage-area networks, thanks to virtualization's growth. It could be a $22-$23 stock."

However, EMC has three other important business segments on top of the VMWare value. These businesses must be included in any EMC valuation, and, as we'll see, when everything is taken in as a whole, perhaps EMC is not undervalued, after all.

VMWare's Value
On August 14, 2007, 10% of VMWare's shares were sold by EMC through an initial public offering (IPO) at $29. This gave EMC $1.1 billion in cash before fees to the investment bankers. Since then, the price of VMWare's shares has risen to the $60 level, generating a very nice unrealized profit for all who owned shares in the company.

In July 2007, shares of VMWare were sold to Intel and Cisco. Each company was able to acquire their shares at a price lower than the IPO price. The primary purpose of these sales was to enhance the relationship of these companies in the virtualization software business, the mainstay of VMWare. It also turned out to be a good investment for Intel (Nasdaq:INTC) and Cisco (Nasdaq:CSCO) as shown in the table below.

Read on...


Popular posts from this blog

Redhot Future Of IT Part I :Marketing yourself as IT professional

I had promised about the "RedHot IT Future Series" and so we discuss here how you should market yourself EFFECTIVELY as an IT professional in this new (and dangerous) web age! Web is the place where you're a hero today and villain tomorrow. While there are lots of professionals who are active on the web, not all are enjoying a good reputation as they got "personal" with others and got into a cockfight. The passive IT professional has nothing to lose but nothing to gain at all!

I know "marketing" might seem as a greasy term but the idea is to have the truth about you out there. You know you're a good person and your family knows that you're really smart person but the rest of the world doesn't!

So the question is how do I market myself on the web as a true "nouveau IT professional". A guy who companies will be tempted to pick up the phone as say "Hey, we wanna talk with you. Can you fly over to Palo Alto (or Guatemala or Johan…

Avastu Blog is migrating to; 1st Jan 2009 live


I will send out emails personally to those who are using my link(s) on their sites.

Thanks much for your co-operation and hope you enjoy the new site and its cool new features :-)

Not like the site is unlive or something..on the contrary, its beginning to get a lot of attention already. Well most of the work is done, you don't have to worry about anything though:

What won't change

Links/Referrals: I will be redirecting the links (all links which you may have cross-posted) to - so you don't have to do anything in all your posts and links. Although, I would urge however that you do change the permalinks, especially on your blogs etc yourselfThis blog is not going away anywhere but within a few months, I will consider discontinuing its usage. I won't obviously do …

Redhot Future Of IT Part 2 :Virtualized Workplaces

Click on the title to hear what I have to say, alternatively click here to listen to what I have to say here.

So what is a virtualized workplace? Does it mean it does not exist? That it's virtual? Well in a certain way YES. This is where the future of our workplace is going to be. Well it is already a reality in some countries.

OK lets start by asking ourselves these questions:
Do you really bond with your colleagues? (think Team cohesiveness)
Do you spend great amount of hours talking about great things that you will do together? (think collaboration)
Do you really feel that you give 100% at work? (think effectiveness)
What do you really miss at your desk? (think personalization)
Is your desk comfortable enough? (Again think optimizing personalization, OK you have done your best to make it your place)Does it really matter to your employer that you are there for him/her? (think commitment)
Or do you get micromanaged over petty issues? (think mismanagement)
Do you see your employees perfor…