Marketwatch says VMW Q1 earnings fell short of estimates https://www.marketwatch.com/story/vmware-q1-earnings-fall-short-of-estimates-as-suspension-of-russia-business-and-currency-movements-weigh-2022-05-26. 3% revenue growth is bad, when the Street was expecting 6% growth. VMW stock price may have collapsed to $70 had it not been for Hock Tan coming in as a white knight to offer $140. Surprised how high a price Broadcom paid given how bad VMW Q1 was. But if you are a VMW shareholder, you are thanking your lucky stars this Broadcom offer came together to save the day
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VMware did not recognize the importance of moving to SaaS/subscription fast enough.
Gee. Isn't that what the board of directors, fellows, general managers and PEs are supposed to determine?
vmware must have a real winning leadership hierarchy of success.
I would say it is too much to pay for the dead company. Too many people and make too less money. Most are just hanging for fun and get money.
You guys should see how much other cloud company make per employee before telling the value of VmW
VMware did not recognize the importance of moving to SaaS/subscription fast enough. They are a minimum of 5 years behind. Unbelievable bad strategic miss going back 5+ years. SaaS/sub is tablestakes and has been for years but for some reason VMware did not understand that. I think management did a great job in getting the price they did from Broadcom given VMwares current state. Capitalism at its best.
Good luck to all.
Broadcom is getting a steal at $140 per share given that the 52 week high for VMWARE was $167. And share price even just a year prior was as high as $204. Yes, the market has collapsed since then, but the cloud players like AWS, Microsoft, Google are all growing well. Even ServiceNow is valued at $95B, even though it is a third of VMWARE revenue. It must be the case that Michael Dell lost confidence in the VMW CEO and management team to ever get back to share price of $160 or $200 in the next few years, so they decided to sell.
VMware is making good sales.
Just the wrong type of Sales. The industry has moved to SaaS / subscription. A lot of VMware is perpetual licenses still. The shift wasn't quick enough, that is all.
The market wants SaaS/Subscription, not perpetual. That's why the stock was falling, not due too a lack of sales.
Broadcom stated they are moving to a rapid shift to SaaS/Subscription. Wouldn't surprise me that after the take over. There will be no more perpetual licenses, this is bad for consumers.
VMware is NOT cheap. Else Amazon, Google, MS etc will offer.
It's low because it doesn't perform...
VMware is (was) more than just the share price.
Broadcom are getting VMware cheap. After the split from Dell the shares were around $125 and with 50% premium that would have been around $187 per share.
"Surprised how high a price Broadcom paid given how bad VMW Q1 was". The premium isn't as big considering the entire market is slumping hard. Try connecting the dots next time!