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VMware Shares Plunged: What You Need to Know

By Tim Beyers | More Articles
August 18, 2011 | Comments (3)

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: As with so many other businesses known for handling digital data, shares of VMware (NYSE: VMW  ) fell nearly 13% in early trading before closing down a little more than 10%.

So what: How EMC (NYSE: EMC  ) chief executive Joe Tucci must be smiling. His company has been buying VMware shares all year long. Expect even more investments as the stock falls for reasons disconnected from the underlying strength of the business.

Now what: If anything, VMware is making itself stronger by partnering with Dell (Nasdaq: DELL  ) and Ubuntu, among others, to boost its offerings for corporate customers and differentiate itself from Microsoft (Nasdaq: MSFT  ) . Where do you stand on this stock? Would you use the selloff as a buying opportunity? Weigh in using the comments box below.

Interested in more info on VMware?Add it to your watchlist.

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Fool contributorTim Beyers is a member of theMotley Fool Rule Breakers stock-picking team. He didn’t own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sportfolio holdings andFoolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insightsdelivered directly to your RSS reader.

The Motley Fool owns shares of Microsoft and EMC.Motley Fool newsletter services have recommended buying shares of Microsoft and VMware amd creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 19, 2011, at 6:05 AM, naughtyguy wrote:

    Looking at a 2 year chart it has had a good run up!

  • Report this Comment On August 19, 2011, at 4:48 PM, monkeydadAC wrote:

    What evidence do you have that EMC is buying shares for anything other than to keep from being diluted from VMW share issuance from compensation stock options and shares issued for acquisitions?

    I see from VMW's filings that EMC owned 80.0% of VMW as of 12/31/10, 79.8% as of 3/31/11, and 79.3% as of 6/30/11.....

  • Report this Comment On August 20, 2011, at 1:18 PM, crca99 wrote:

    Next time please say more about VMW, and EMC, differentiating from MSFT for corporate customers.

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