Dell Spins Off VMware: All You Need To Know

Dell Technologies Inc DELL stockholders will receive .440626 of a share of Vmware, Inc Common stock, Class A VMW for each share of Dell held as of October 29.
Each share of VMware Class B will convert into one share of VMware Class A common in connection with the distribution before the receipt by Dell’s stockholders of such shares.
Dell Technologies stockholders will receive cash instead of any fractional shares of VMware Class A.
The distribution will likely complete on November 1. Dell will shed its 81% stake in VMware, creating an independent software company with a stock market value of $64 billion, Financial Times reports.
The separation from Dell will free VMWare from Dell’s focus on corporate data centers and give it more freedom to invest and make acquisitions focusing on cloud computing.
Dell, buoyed by the work-from-home boom in PC sales, is now pinning its hopes on the new market for “edge computing,” as some of the computing power in centralized cloud data centers moves to smaller, local facilities closer to users.
Dell’s remaining hardware operations have an implied value of $33 billion, based on its latest share price.
Beginning with the buyout of his PC company, Dell acquired server and storage company EMC for $67 billion before retaking the group public in 2018.
Dell fought with shareholders over claims that he bought Dell cheap and used complex financial engineering in the EMC deal to short-change investors.
Silver Lake, a private equity firm that helped mastermind the deal, will retain stakes in Dell and VMware worth $11 billion.
Dell had to borrow $70 billion to finance its deal.
VMware pays a special dividend to shareholders of about $12 billion, helping Dell lighten a remaining net debt load.
Price Action: VMW shares closed lower by 0.3% at $151.70 on Friday.

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