Market Overview

Rod Hall: VMWare, EMC Deal Was 'Never' Likely

Share:
  • VMware, Inc. (NASDAQ: VMW) CEO Pat Gelsinger said during the company's VMWorld event that it was not interested in acquiring EMC Corporation (NYSE: EMC).
  • JP Morgan's Rod Hall said that he was not surprised as the firm was "never particularly convinced" that a deal "was likely."

VMWare's analyst day turned out to be a negative for EMC, according to JP Morgan tech analyst Rod Hall. This is because VMWare CEO Pat Gelsinger said that the current federation structure between the two companies was the strongest, pushing back against media rumors that he was pushing for an acquisition. At the analyst event, Gelsinger said that the move was "not a serious option."

Shares of EMC were down 2 percent Tuesday to $24.36, while shares of EMC gained 0.7 percent to $79.76.

Hall noted that JP Morgan was skeptical of the rumors and that the firm "expected" this outcome. Nonetheless, he said that it was a negative for EMC. In addition, it "puts more pressure on Cisco Systems, Inc. (NASDAQ: CSCO) to either acquire or develop its own hyperconverged platform."

In a note from April, WR Hambrecht analysts argued that Cisco should look to acquire NetApp Inc. (NASDAQ: NTAP).

Tech analysts continue to view promise in the hyperconverged market. In a 2014 report on the hyperconverged market, analyst firm IDC argued that, "In all likelihood, the only survivors in this market may be vendors with robust partner ecosystems and/or vendors with commercial variants of open source platforms."

Latest Ratings for VMW

DateFirmActionFromTo
Aug 2019MaintainsBuy
May 2019MaintainsEqual-Weight
May 2019ReiteratesOutperform

View More Analyst Ratings for VMW
View the Latest Analyst Ratings

Posted-In: Cisco Systems EMC Corporation JP Morgan Rod Hall VMwareAnalyst Color Analyst Ratings Tech

 

Related Articles (CSCO + EMC)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DEReiterates175.0
AMWDMaintains92.0
FTDRMaintains55.0
REDUDowngrades
ZSDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Delta Finds Resistance At The $44.50 Area For Fourth Day In A Row

SunTrust Initiates CoreLogic At Neutral, Notes 'Reasonable' Valuation