IPO - VMWare effect on EMC

J

jimclark

I wonder what effect will VMWare IPO have on EMC stock price, per dollar increment.

If VMWare jumps from initial $22 to say $30...what is the effect in EMC price?

Thanks.
 
EMC will initially hold 90% of the shares in VMWare. Considering that VMWare is worth $10 billion at the IPO (30% of EMC value), when the share goes form $22 to $30, EMC share will be up approx. 2.5 dollar.
 
From this mornings GS market report:

2. EMC Corporation EPS (FY Dec) 2007E $0.69, 2008E $0.84 Buy/Neutral
(EMC) 18.51
Source of opportunity
We are adding EMC to the Americas Conviction Buy List. The combination of
EMC's 2Q results which highlighted more balanced growth, multiple product
cycles, and initiatives to increase shareholder value post the VMware partial IPO are
likely to drive upside and enable EMC's stock to reach our 6-month target price
of $22 over the next 1-2 quarters (17% upside). As we see it, EMC has multiple ways
for shareholder value to be unlocked, some of which are very short term in nature.
For example, VMware's upcoming IPO should take us one step closer to
investors understanding the underappreciated value of core EMC.
 
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