It seems like VMware reported better than expected financial results.
Maybe the deal was agreed too fast?
What do you think it could have happened to the stock price if the deal wasn't signed? Now stock market is recovering...
8 replies (most recent on top)
"What is the $9B Goodwill on the balance sheet ?"
Goodwill is an actual accounting term for the purchase price of the company minus value of tangible assets.
Simplified: You buy a company for 1 million. They have equipment and building worth 400K and accounts receivable worth 300k, you have 1M -700k= 300K in "goodwill"...that covers thing like the existing customer base, the solid brand name, any unique tech, etc.
Accountants have to account for every dime and this is a line item for that category of $.
Lose the hard on... this is noise. changes nothing.
just be prepared...
mixed results stock down and will struggle as wasnt rosy they tried to spin it to buy time
The stock will fall again. This is a temporary recovery. The country is headed deeper into recession. One has to appreciate the irony: Broadcom never would have happened if Biden had not destroyed the economy. VMware employees, like most companies in the valley, are majority Biden supporters. You voted for this.
What is the $9B Goodwill on the balance sheet ?
Normally that's the delta between the paid value and book value of an aquistion - is that Pivotal /CB/ something else, or the sum of all that baggage. ?
I think it’s inflated/ easy to misrepresent. Customers are booking now and longer terms to avoid the uncertainty of price increases with Broadcom. Eventually that will show up as lower results in future quarters when the renewal may have been planned.
Well net operating income and free cash flow are down so really seems like mixed results.
This is because folks are signing long term deals with VMware before the Broadcom nightmare begins. They are just getting runway so they have time to pivot if Broadcom doesn’t give them a good deal. Much of these deals are now done. Real music in Q3.