Criticism about Michael Dell’s attempt to buy the VMware tracking stock for $22 billion came from Paul Singer’s Elliott Management this week.
Reports say the hedge fund has communicated with the owners of the tracking stock, which is traded as Dell Technologies, with criticism of the deal, according to an article in the New York Post.
“They made it clear they are against it,” one source commented. Another added, “There are certain aspects of the deal they say are pretty awful.”
Singer is ensconced in the limelight. In a cover article titled Paul Singer, Doomsday Investor, The New Yorker noted that “In the press, Singer and similar investors have been compared to vultures, wolves, and hyenas. Bloomberg has called Singer “aggressive, tenacious and litigious to a fault,” anointing him “The World’s Most Feared Investor.” Singer’s ventures have been consistently successful, with average annual returns of almost fourteen per cent, making him and his employees enormously wealthy. The mere news that Elliott has invested in a company often causes its stock price to go up—creating even more wealth for Elliott.
Singer has been deploying his riches in Republican politics, where he is one of the G.O.P.’s top donors and a powerful influence on the Party and its President. According to those who know Singer, in politics, as in business, he is intent on doing whatever it takes to win.”
The web site The Motley Fool recently noted that “Virtualization solutions provider VMware (NYSE:VMW) reported its second-quarter results after the market closed on Aug. 23. Revenue continued to grow at a double-digit pace, driven by the rapid growth of NSX and vSAN, although that growth rate did slow down compared to the first quarter. With parent company Dell dropping any plans for a merger or other exotic transaction, a cloud of uncertainty has been lifted. Although VMware is on the hook for a giant one-time dividend.”
Forbes weighed in, as well, suggesting that “The growth is likely to continue in the coming quarters as well. We have created an interactive earnings preview dashboard for VMware where we have summarized the company’s guided segment revenues and operating margin, and have used our forecasts to arrive at earnings for the quarter. If you disagree with our forecasts, you can change expected revenue, operating margin and income margin figures for VMware to gauge how it will impact expected EPS.”
Added CRN.com, “VMware is one of the “exciting” stars of the IT automation era reshaping the technology landscape with its multicloud IT automation portfolio, said Glenn O’Donnell, senior vice president and research director of Forrester, a top IT market researcher, in a keynote address at XChange 2018. “I would say in IT automation, one of the more exciting vendors is a vendor that some people think is not exciting, and that’s VMware,” said O’Donnell in a response to a question on which vendors are driving the most IT automation. “VMware has really jumped on cloud automation in a big way. It doesn’t own that market—nobody owns that market, it’s a pretty fierce, competitive world. But VMware is certainly one of the more powerful players in this business for IT automation.” It is VMware’s multicloud prowess in a hybrid cloud world that is making a difference in IT automation, said O’Donnell.”
By Howard M. Riell