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EMC buying VMware is the future

Look guys, the options are pretty limited. If VMware, Inc. (NYSE:VMW) can't leave the EMC Corporation (NYSE:EMC) Federation and the Federation somehow has to upvalue itself for investors and find shares priced high enough to pay off Elliott Management, then one bit of the Federation has to buy the rest or the Federation has to be acquired/merge with a white knight.

An analyst community rumour says EMC is thinking of shopping itself to its subsidiary, VMware, and white knight possibilities of Chuck Robbins' Cisco Systems, Inc. (NASDAQ:CSCO) and Meg Whitman's Hewlett-Packard Enterprise are both non-runners.

So that leaves EMC buying VMware or VMware buying EMC. We'll rule out Pivotal and Virtustream buying the Federation because they are not publicly quoted and are minnows compared to EMC and VMware.

Either way, we get a single quoted EMC/VMware vehicle called EMC or VMware. With EMC already owning 80 per cent of Vmware, it's hard to see why, in either the medium or the longterm once operational savings have been made, newEMC would be given a significantly higher share-price by investors. Not much would have changed...


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