Looking at the 1 year, 2 year, 5 year VMW stock chart on yahoo finance is depressing. VMW stock was $160 last year and $200 2 years ago, and now it will never cross $140. Very sad end to a good company. Wish I had sold more VMW at $160 last year.
Question now - should I sell some of my VMW stock now at $111? Or wait for the transaction to close and sell at $140 a year from now? Or should I wait to exchange VMW for AVGO shares at close? The market is factoring in some risk the deal won't happen.
Well, as they say... it depends.
This is a cash and stock transaction. There is a ratio defined in the early paperwork between AVGO stock and VMW. BUT as the market has went down that ratio hasnt changed. (right now the ration means about 119/120 per vmware share. This is a big reason you are seeing us in the low 110/115 area.
I'll have to read through the early agreements and SEC stuff again, but you are going to see the stock go up and down over the next few months.
Personally.... Whether VMW, CTXS or MS (I have worked at them all) I sell every share I get the first opportunity I get. Employee stock grants and RSUs often seriously over weight one stock in your portfolio. I AWLAYS cash out and get it back into my hands and into more diverse funds (even if it is a broad tech fund).
NFA but AVGO is a good hold.
At this point I would wait. If what I have understood is correct, half of your stocks will be paid at 142 while half will be converted to Broadcom stocks (At the moment the conversion rate is less than 142 but still not so bad). I don't think Broadcom stocks will go down any further, it went down in the last months just because it followed the S&P500 bad performance.
But, if you are based in EU keep in mind that the dollar increased a lot in the last months, is now to the parity level so maybe it may be convenient to sell if we expect the dollar to drop in the future. (back to 0.80 for example)