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VMWare (VMW) Stock Pressured by Dell's EMC Takeover

NEW YORK (TheStreet) -- VMWare (VMW - Get Report) shares are tumbling 10.82% to $70.14 on Monday following the announcement that Dell, which has a stake in VMWare, will acquire data storage company EMC (EMC) for about $67 billion in cash and stock.

Under the transaction, which is expected to be completed next year, software maker VMWare will remain a publicly-traded company, and Dell will pay $33.15 per EMC share.

"After the transactions, we estimate that VMW's ownership interest will be segmented as: 19% open market (like currently), 28% Dell, and 53% tracking shares that may be spun off (this is why VMW's shares are under pressure today, we believe),"said FBN Securities, according to Barron'

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As part of the deal, Dell would have to take on nearly $45 million in debt, Barron' stated.

Based in Palo Alto, CA, VMware provides virtualization infrastructure solutions in the U.S. and...