One Family's Blog

Owning Cypress Over SunPower Makes Sense; EMC Over VMware Doesn't

The article erroneously mentions "VMware Inc., which EMC purchased for $625M in 2004, was spun out on April 2007". The spin-off timeframe was August 2007, not April. Alan Feldman kindly pointed this out to us yesterday:

www.vmware.com/company/

Regards,
onefamilysblog.com

Owning Cypress Over SunPower Makes Sense; EMC Over VMware Doesn't

sssrosss: You are correct. One times revenue valuation may be conservative more so in the case of EMC as compared to CY. A better way to value these companies might be using DCF analysis after coming up with a CAGR value for the businesses after taking out the spin off figures from their financials. Please see our article on Google for an example: www.onefamilysblog.com...


User 1839: The sum-of-parts market valuation can be done as follows using the formula column values in the tables in the article:

Spin off + Parent enterprise value = B
Spin off enterprise value = D
Parent enterprise value = B-D

Regards,
One Family's Blog
www.onefamilysblog.com