What is VMWare and How Do You Own it?
VMWare (VMW) is virtualization software that enables one server to do the work of multiple servers including web servers, storage servers, application servers, mail servers and database servers, essentially eliminating the need for these different servers. This reduces vastly, the energy costs that the higher number of servers would otherwise consume, and also reduces the cost of setup, managment and maintainence that all the different servers would require.
VMWare is 90% owned by EMC (EMC) after today. This morning, while VMWare’s price shot up 75% above its IPO price (most of you couldn’t have bought it under $48 so don’t feel too bad), EMC was down. I think any dip in EMC should be bought. Remember, they can sell VMWare shares anytime they want and raise capital.
As for VMWare, chasing the stock in this kind of an environment is not a good idea. If it pulls back to the mid-40’s though, it would be worth a look.
– Faisal Laljee
Full Disclosure: I own EMC but my position can change anytime without notice.
EMC is a long term hold and should do well.
I wouldn’t read much into a small downturn in EMC over the next several weeks as the market seems to be punishing most stocks regardless if they are subprime sensitive, cash sensitive or show both revenue and earnings growth.
The market seems to have been vacillating back and forth from concentrating on earnings growth to revenue growth and now seems poised to reward only companies that deliver both. EMC should come out on top, eventually.
Disclosure: This is the opinion of Saul Sterman and may not be the consensus at CrossProfit.com.
Looks like someone at Barron’s read your article!
CrossProfit