Shares of cloud software provider VMware (VMW) tumbled 7.2% through 11 a.m. ET on Tuesday amid reports that Chinese regulators may delay -- or forbid -- Broadcom's proposed acquisition of the company.  

It's worth pointing out, though, that today's decline comes on the heels of several weeks of gains in VMware stock on opposite rumors that China was about to approve the merger, and leaves VMware stock trading right about where it was at the start of the month.

Why might China not approve this merger?

Nor is October the only month that has seen sharp swings in sentiment surrounding Broadcom stock, tied to a "will they or won't they" analysis of Chinese regulators' intentions. In fact, as far back as August Broadcom was saying it thought it had a green light from China to buy VMware.

But here's the thing: China and the U.S. are currently feuding over technology, with the U.S. restricting exports of high-tech semiconductor chips to the Middle Kingdom, and China responding by leveraging its antimonopoly powers to interfere with some U.S. acquisitions (MaxLinear's plan to acquire Silicon Motion Technology), and block others (Intel's hoped-for acquisition of Tower Semiconductor).

Will they or won't they?

And there's a very real risk that Broadcom's attempt to buy VMware will get caught up in this web -- but that may not be the only thing worrying VMware investors today.

Consider this twist: Back when Broadcom originally announced its plans to acquire VMware, the company said its purchase price would be either $142.50 in cash or 0.252 shares of Broadcom common stock for each VMware share, as VMware shareholders preferred -- but prorated so that in any event, the purchase price would be paid half in cash and half in stock.  

As of market close yesterday, this implied an average buyout price of about $185 a share for VMware stock (50% paid at $142.50, cash, and 50% paid at .252x Broadcom's $902 share price). That's only about 3% above VMware's closing price Monday.

Worse, the average price could fall even further if Broadcom stock declines in value. In September, for example, the stock lost 12.5% of its value over the course of just three weeks -- so that's a risk for VMware investors even if China does approve this merger at some time that is inopportune for Broadcom's share price.

Long story short, there are at least a couple of things for VMware investors to worry about in this transaction. It's not surprising then, that they might be getting a case of the jitters today.