VMware, meanwhile, is set to regain its independence 18 years after it was bought by EMC for less than $1 billion, in what turned out to be one of the most successful tech acquisitions. The company was buoyed by the work-from-home boom in PC sales and 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. Thanks partly to the plans for VMware, Dell’s shares have since risen more than 80 percent, giving it an implied stock market value of nearly $33 billion after the spinoff.Ĭompared with Michael Dell’s original business, Dell Technologies now sells a wider range of gear for corporate data centers, though roughly 60 percent of its revenue still comes from PCs. A year ago, after deducting the value of its VMware stake, Dell’s share price ascribed virtually no value to its remaining tech hardware business. Wall Street has also been wary of the complex financial engineering used to hold together the heavily indebted group. As part of the spinoff, VMware is paying a special dividend to shareholders of about $12 billion, helping Dell lighten a remaining net debt load that stood at $32 billion at the end of July. In other moves to try to appeal to a wider group of investors, Dell has said it will start paying a dividend.ĭell has been weighed down by debt after borrowing about $70 billion to finance its dealmaking. After the spinoff, Dell will be “a simpler company with a better capital structure,” said Krish Sankar, an analyst at Cowen.
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