FWTX

The Short Case on VMWare

This article (as originally posted) did the math wrong, but reached the same conclusion. Seems like the author is stretching to make the facts fit his thesis, no matter what those facts are.

From his original post:
"Much the same analysis applies, in my opinion, to EMC's spinoff of VMW. The market cap of VMW is now $38.89 billion. However, EMC owns around 86% of VMW. The implied valuation of EMC's stake in VMW is therefore: 86/14 * 38.89 = $238.9 billion. EMC's current market cap stands at $47.99 billion. In effect, the value of EMC's stake in VMW is $191 billion greater than the total market capitalization of EMC. It is as if all of EMC's other assets are worth a negative $191 billion."