E=MC Paid?

EMC Corporation

CEO Joseph Tucci is out making some interesting comments this morning that may make investors take a second look at his company, particularly if it is able to execute on its cloud strategy. Tucci said this morning that he would not sell VMware

for $60 billion. EMC owns approximately 80% of VMware, the leader in cloud computing. VMware's market cap is $40 billion, so Tucci is saying that he thinks it is worth at least another 50% higher than where it is currently valued at. All CEO's are optimistic about their businesses, but this is a huge discrepancy in price, and considering the traction that VMware has seen recently, it would not be surprising for VMware to trade up towards that $60 billion mark over the coming months. Tucci also said that EMC will focus on stock buybacks, and takeovers of other companies as opposed to paying out a dividend. This is a good sign for EMC investors and potential investors. Tech companies that pay dividends for the most part have stopped innovating, and once a technology company stops innovating, more often than not it becomes a value trap. Just look at Microsoft

, and lately Cisco

. Speaking of Cisco, Tucci said that EMC would partner with Juniper

despite its relationship with Cisco. EMC, which makes, delivers, and supports information infrastructure and virtual infrastructure technologies and solutions, has long been thought of as a company that offers strong growth, but has never really been mentioned among the top tech companies on Wall Street. If the company can excel in the cloud computing space, that could all change. Tucci said that EMC would be worth "A Lot" more than the $28 per share it is currently trading at if it can deliver its objectives in the cloud. Trading at 16 times earnings for 2012, shares for a company growing at 16% each year is not expensive at all. Over the past 52 weeks, shares of EMC have returned 50%, compared to the near 20% return in the S&P 500. Trading at 1.22 times price to earnings growth, shares are not expensive at all. It does appear that the equity markets are starting some kind of correction here, so investors may want to wait and see if they can get EMC a little cheaper. Albert Einstein is credited with the formula E=MC ^2, from which EMC gets it name. If EMC can deliver on its cloud initiatives, then EMC may just equal big time profits.