You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Buy VMware Tuesday Morning?
- Thread starter MrDODGE
- Start date
F me for not buying this and just parking it in my ROTH IRA and forgetting about it. Think I blew a GOOG like opportunity....
VMware going to 100 easily
go long
go long
I want someone to kick my ass for not buying this at IPO in my ROTH IRA and leaving it alone.
Buy and hold sometimes works. This will probably run like a GOOG, BIDU, RIMM and double, triple in the next 2-3 years.
I don't know when it comes to tech high flyers really. I think about the guys in the tech bubble sometimes thinking that YHOO, CSCO, SUNW, EBAY etc... where they would run forever but eventually fade.
Every little pullback is gobbled up and spit out and trend higher regardless of market indices.
When I think about buying the dip in this, I pussy out. I think quarter earnings are 10-24. Any predictions from here on out?
Well over a $100 by then or a pullback?
Buy and hold sometimes works. This will probably run like a GOOG, BIDU, RIMM and double, triple in the next 2-3 years.
I don't know when it comes to tech high flyers really. I think about the guys in the tech bubble sometimes thinking that YHOO, CSCO, SUNW, EBAY etc... where they would run forever but eventually fade.
Every little pullback is gobbled up and spit out and trend higher regardless of market indices.
When I think about buying the dip in this, I pussy out. I think quarter earnings are 10-24. Any predictions from here on out?
Well over a $100 by then or a pullback?
Jesus Christ this thing flies. Might hit a $100 today!
BOOM $100.
Funny you should ask, I was looking into this today.
VMware shares outstanding is 382M, the IPO floated 33M, and EMC retains 329M shares (along with 98% of the voting rights).
The "stub" of EMC, that is, the old school data storage company minus its stake in VMware, is worth $12.3B at today's closing prices. That is 10.27 times its trailing earnings (ex-VMware) of 1194M, and 1.10 times its trailing revenue (ex-VMware) of 11.2B. That's the same core business that was rewarded with P/E in the mid 20s in 2004.
For comparison, VMware in its entirety is valued at $38.9B, which is 310 times its trailing earnings of 125M, and 40 times its trailing revenue of 974M.
If you think EMC's core business is worth more than 10 times trailing earnings, you can buy EMC and sell VMW, like I did at today's close. It might be a rough ride but if you've got the liquidity, it's very difficult to lose in the long run. The theoretical hedge ratio is 6.37 shares of EMC for every share of VMware.
Incidentally, that means that should VMW reaches 6.37 times EMC's stock price, then EMC's core business will be valued by the market at zero dollars. Seems implausible but it could happen. Remember 3Com's spinoff of Palm? There was a while there when 3Com ex PALM had a significantly negative market value.
Martin
VMware shares outstanding is 382M, the IPO floated 33M, and EMC retains 329M shares (along with 98% of the voting rights).
The "stub" of EMC, that is, the old school data storage company minus its stake in VMware, is worth $12.3B at today's closing prices. That is 10.27 times its trailing earnings (ex-VMware) of 1194M, and 1.10 times its trailing revenue (ex-VMware) of 11.2B. That's the same core business that was rewarded with P/E in the mid 20s in 2004.
For comparison, VMware in its entirety is valued at $38.9B, which is 310 times its trailing earnings of 125M, and 40 times its trailing revenue of 974M.
If you think EMC's core business is worth more than 10 times trailing earnings, you can buy EMC and sell VMW, like I did at today's close. It might be a rough ride but if you've got the liquidity, it's very difficult to lose in the long run. The theoretical hedge ratio is 6.37 shares of EMC for every share of VMware.
Incidentally, that means that should VMW reaches 6.37 times EMC's stock price, then EMC's core business will be valued by the market at zero dollars. Seems implausible but it could happen. Remember 3Com's spinoff of Palm? There was a while there when 3Com ex PALM had a significantly negative market value.
Martin
So does this run like A GOOG or BIDU long run?
Again, I can't bring myself to buy it. I get scared when stocks go over a $100 with flashbacks of tech bubble. But this is a whole new ball game.
Again, I can't bring myself to buy it. I get scared when stocks go over a $100 with flashbacks of tech bubble. But this is a whole new ball game.
$107 and going higher today. You can't stop the VMW train. Screw GOOG, see you at $150 after earnings 10-24.