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Broadcom said in talks to purchase VMware (update)

May 23, 2022 9:25 AM ETVMware, Inc. (VMW), AVGOQCOM, DELLBy: Joshua Fineman, SA News Editor67 Comments

Broadcom Reports Quarterly Earnings

Justin Sullivan/Getty Images News

Update 9:25am: Updates shares, add transaction details.

Broadcom (NASDAQ:AVGO) is said in talks to acquire cloud-computing company VMware Inc. (NYSE:VMW). VMW shares surged 19% in premarket trading, while Broadcom fell 4.1%.

Talks are ongoing and could still fall

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Comments (67)

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Down ~23 as I write. Talk about ridiculous.

Disappointing man. Market is not happy at all with this deal. Actually they stopped dumping it from few sessions. News was out to some people.
Scotts Miracle-Gro Sucks profile picture
Might as well acquire stuff while prices are depressed
Everyone but no one wants to own VMWare?
Just keep the dividend on track!
Piper Sandler PT at $151.
Pleaaaaaase no. Everything I've used that Broadcom has acquired has made my experience worse.
VikingOne profile picture
Not so convinced of the quality of VMware
Despite the doomsayers, companies are fat with cash and are looking for M&A to drive growth. As long as the children in Washington don't stand in the way, this consolidation will be good for the overall industry going forward. Looking for much more activity in the next few years.
RetiredAndLovingLife profile picture
Based on the premium $AVGO paid for CA this $vmw deal should be in the $125 range. Just guessing of course. Then again $VMW is a more valuable gem and I expect to see other bidders looking to tap this cash cow growing top line at double digits. Hang on tight! Yippee.
It's gonna be cash + stock though
Broadcom Inc. (AVGO)
543.19 -3.02 (-0.55%) At close: May 20 04:00PM EDT
543.00 -0.19 (-0.03%) After hours: May 20, 07:59PM EDT

Broadcom is almost 20% off it's high (677+) before the deal.
I'm expecting it to drop more.
Good entry point ahead ?
@RollingTheDice depends on how Mr market reacts
@RollingTheDice AVGO was around 450$ a year ago, during the 2021 bubble, so doesn’t matter how off it’s high it is as the valuation is still way too rich at 8 times EV to sale and GAAP PE estimated around 25. Some semi companies with comparable quality business are trading at half those ratios.
Mick Research profile picture
@Amstragram After acquiring CA $AVGO does a lot of software too.
Karl Kelly profile picture
As a Boradcom shareholder, this is interesting. Hope they don't overpay. Dell was silly to not buy it all and spin it off.
AlphaMove profile picture
This is great news for $DAIO a leader in cloud and all semiconductors related security. Cyber security is becoming engrained in cloud technology.
Some one is dumping AVGO in last 3 trading sessions.
Elon the GOAT profile picture
This will be a stupid deal
InvestmentFreak profile picture
Bullish for $NTNX who could be next!
@InvestmentFreak hope not as this is so undervalued right now, a buy out would be too low !
My father was the first patent counsel for Broadcom, though as an outside counsel, about 35 years ago. That was when they had the famous controversial CEO. My father said the one best factor in deciding what stocks to buy was how good the CEO was. Hock Tan is one of the best out there, so i will always hold a lot of Broadcom. I think a few of my holdings fall into that category, including TTD, Microsoft (post Ballmer), NVDA, and, of course, AMD (who I used to work for, when Jerry Sanders was their CEO).

I am now looking to buy non-technology companies. This economy could drive technology stocks further down a lot. Time to buy more reliable, high dividend stocks.
What is story about TTD? Is it managed by strong CEO like Broadcom, NVDA and AMD?
TTD was founded and managed by a fantastic CEO.
@4121 Jerry Sanders had to be one of the worst ever.
Hock Tan is genius this is most likely another tactical move. AVGO largest position in our DRIP since 2018.
Mister Doom profile picture
Never go through not with this administration.
HardCovenant profile picture
@Mister Doom agreed, as Larry Summers pointed out the antitrust laws have been vaped by the juvenile FTC hipsters and a Columbia law school professor who wrote one of those school papers where you count the words
ItsPlaytime profile picture
Great fit, what a cheap profit machine to buy
When VMW dropped below $105, I started purchasing since it was trading under 15x Forward PE. As of Friday’s close, VMW was only 1.1% of my portfolio. I’m kicking myself for not buying more shares.
@Tempyy vmw used to be 2.5% of my portfolio but now 1.5% after selling

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