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EMC (EMC +1.1%) and VMware's (VMW +5.6%) Pivotal Initiative will be taken public, EMC CEO Joe...

EMC (EMC +1.1%) and VMware's (VMW +5.6%) Pivotal Initiative will be taken public, EMC CEO Joe Tucci discloses during the companies' investor day (webcast). EMC will own 69% of the spinoff, and VMware 31%. Pivotal is headlined by EMC's Greenplum analytics database/hardware unit, but also features a slew of other product lines aimed at companies working on big data projects or developing Web/cloud apps. Given the hype surrounding Pivotal's addressable markets, the post-IPO valuation could be huge.
Comments (8)
  • derekrv
    , contributor
    Comment (1) | Send Message
     
    Naive comment - but if EMC owns 69%, and VMW owns 31%, in what way is the company public ?
    13 Mar 2013, 10:48 AM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (853) | Send Message
     
    Those are pre-IPO numbers. Naturally there'll be some dilution to the stakes following an IPO.
    13 Mar 2013, 10:54 AM Reply Like
  • freeze1617
    , contributor
    Comments (3) | Send Message
     
    the shareholders of EMC will receive 69% and VMW shareholders will receive 31%. For ex: if the IPO is for 200 million shares. EMC gets 138 million to be split up to investors and vmw gets 62 million split to investors
    13 Mar 2013, 02:33 PM Reply Like
  • Jocardan
    , contributor
    Comments (30) | Send Message
     
    I own 925 shares of EMC. Does anyone know what this will mean to me?
    13 Mar 2013, 10:51 AM Reply Like
  • Ed's perspective
    , contributor
    Comments (262) | Send Message
     
    You will still own 925 shares of EMC and you will receive an additional certificate for some undetermined number of shares from the new/spun off organization. The EMC and VM Ware will trade ex-"dividend" for lack of a better term some undetermined amount /value that the spinoff supposedly represents.

     

    Overall .... this typically works out well. The thing to watch for is if the values place on the new company deducted from the old company make sense and whether or not there are big payments / dividends back to the original company or a huge DEBT burden taken on by the new company to enrich the old company. THAT is mischief but i don't THINK that's in play here. We'll see.
    13 Mar 2013, 11:42 AM Reply Like
  • spybreaker
    , contributor
    Comments (235) | Send Message
     
    I bought shares of both EMC and VMW during the recent dips and my plan was to sell them on their way up. So are you saying that it's a good idea to hold them to recieve the new company shares which could potentially have a price boost during the IPO? I presume that the share price of EMC and VMW would drop relative to the IPO of the new company's share price? Wanted to know the overall impact on the value of my money in EMC and VMW. Thanks.
    13 Mar 2013, 11:59 AM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (853) | Send Message
     
    That depends on whether EMC/VMware choose to hold onto their post-IPO stakes in Pivotal. If they maintain their stakes, as EMC did with VMware following its IPO, no shares will be distributed.

     

    But EMC/VMW shareholders would still benefit if the IPO performs well, much as EMC shares have benefited from VMware's performance.
    13 Mar 2013, 12:03 PM Reply Like
  • z06
    , contributor
    Comments (64) | Send Message
     
    yes hold onto them. Look what happened to all the shareholders who had MO (phillip Morris) Stock before they spun off Kraft, PM international and now Mondelez.. I had a 500 shares of PM now I have trippled my value by getting additional shares in all the spin offs.
    Also Getting dividends in all of them compounding nicely.... 10,000 became 35,000 in just a few years..
    3 Nov 2013, 11:06 AM Reply Like
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