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

  • 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

Aug 2019MaintainsBuy
May 2019MaintainsEqual-Weight
May 2019ReiteratesOutperform

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


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