https://seekingalpha.com/news/3934887-vmw-stock-drops-on-report-ftc-talking-to-third-parties-in-broadcom-deal-review
29 replies (most recent on top)
VMware definitely needs to be fixed but Broadcom is not the company to do it. Let this acquisition fail. VMware will recover.
The waste here is insane! So many people and departments here exist only to help and enable VMware. They are not close to the product at all. Just here to create work, coordinate work, and keep people who are generating revenue busy. We seriously do not need the mountains of internal enablement and meetings that are create. Most of it is a distraction for those who build and sell product. That is all we need to focus on!
@3oih+1l7fDvwl For sure.
The key is cutting the fat, and streamlining the product offerings and the org.
That's what a lot of VMWers don't wanna hear.
Why do you think so many jumped ship after the announcement? The idea of BC acquiring VMW is anathema to them. (Look it up in the dictionary 🤓)
Ok time to talk some sense -
Fact - VMware is, and can be still profitable! - Would a financial genius like Hock (like him or not) be willing to pay $69 billion if it wasn't?
Fact - VMware is obese and wasteful! - The leadership of the past 10 years has been absolutely atrocious. Most, if not all, need to be cut, especially Magoo! Seriously how that dude has failed upward, more gracefully than a ballerina is beyond me.
Fact - Cut 40 to 50% of the company, bring in some folks who understand how to streamline our products to deliver value for all the organizations that can't move to the cloud, and you'll have a thriving and prosperous company again.
@2rbn+1l7fDvwl great take.
I agree: there is no going back to how things were. Shame that so few on this sub can admit that reality. They don't wanna let go of their VMware Teddy Bear. 🧸
And is activision equally doomed? No one knows… but gotta love the crazy speculations going on here. Are there going to be locusts that destroy the crops in california as well?
I agree, the collapse of the deal would be tragic. Not because I want to work for BCOM, but the impact it would have on the entire VMware business would be immense. To assume its going to go through maybe wishful thinking, MS and Activision are struggling:
https://www.bbc.co.uk/news/technology-64570890
LOL. You should work at Wall Street! Your talents are wasted.
"Other suitors will show up - Michael will see to it."
Yes, M.Dell will indeed find another suitor. To strip the company's assets and shut it down.
What people don't seem to understand is that M.Dell and them do not want this company. Octane gave them a sweetheart deal, way above the price at the time. And everybody knows it. So if this fails, vmware will have a stink on it so bad that no one will touch it.
Why do you think M.Dell spun the company off?
Officially: To unlock shareholder value.
Unofficially: Gimme money.
https://www.crn.com/news/cloud/michael-dell-broadcom-unsolicited-vmware-offer-was-not-expected
“We received this unsolicited offer from Broadcom—we weren’t expecting that,” said Dell during a recent Town Hall meeting with VMware employees.
- Dell isn't going to just watch as this lucky break evaporates. If the merger fails, the stock will plunge, some shark finance company will give him an offer, he will accept it, and vmware will be sold off into pieces.
Do you want to work for TaTa? Or those geniuses at HCL? Because that's the kind of deal that M.Dell will accept, if the BC merger fails.
Read it twice if you need to: VMware is no longer a viable company. No company is, after accepting a buyout. It either succeeds or it crashes. There is no going back to how things were.
VMware stock has plummeted to the 60s and recovered. And for the last decade it has been a dysfunctional basketcase. Everything would be fine if Broadcom failed. It will simply be dysfunction as usual. The stock will recover. Other suitors will show up - Michael will see to it. But Broadcom at least won't win and VMware will survive to fight another day.
Maybe not in the past but Ms. Khan might be on to something this time.
Executives will benefit regardless of the outcome.
On the other hand, employees and customers may not fare as well.
Check out the vmw subreddit - there's a bunch of customers scrambling to make the the switch to Azure Stack ASAP because of price scares and general dysfunction.
From the WSJ article mentioned before
https://archive.is/20230207045554/https://www.wsj.com/articles/federal-trade-commission-lina-khan-federal-judge-meta-within-unlimited-virtual-reality-11675723824
Enter Ms. Khan, the ambitious FTC Chair who wants to stop big tech companies from growing via acquisitions whether or not the purchases threaten competition or harm consumers
Does anyone here think that consumers are going to benefit from Hock acquiring VMware?
Given Hock’s past history, I would think there will be enough evidence to put this case over the bar of being easily rebuked by a judge. Hock’s promises not to do what he did before to consumers is a pretty poor defense. “Your honor, I have a blog post here that says Hock is going to be a good boy this time”…
Let’s go to court baby!
I need to get another bag of popcorn.
All these oracles of doom are clueless. Nobody knows what will happen one way or the other. Remember these are the same guys that predicted that the deal will be done and dusted by November 2022.
Imagine our EXACT situation and employee morale, individuals stressed, limited output, etc, etc for ANOTHER 9 months or a year... It would not be good.
Imho, a failed deal is better than working for Hock and the environment he will create. Everyone has a different situation, but for me, I can live with uncertainty and a lower stock price.
Look, the US GOV has had a hand in trying to slow a lot of deals lately, but they have had limited success. Their legal concepts and arguments have been getting tossed. It is odd to look at some of the cases they have brought in the last year or two, REALLY stretching the bounds of existing juris prudence in this space.
Mostly they read like "this isn't fair" which really is not a great legal argument. Oh they look to a lot of previously decided cases and try to reference things that are VERY VERY loosely connected. But its generally weak tea.
For you VMW employees hoping the US GOV or the EU stops this... Imagine our EXACT situation and employee morale, individuals stressed, limited output, etc, etc for ANOTHER 9 months or a year... It would not be good.
Or Imaging that they "try to stop it" and AVGO accepts it without a fight, the VMW stock will INSTANTLY drop back to the sub-100 dollar level it was before the announcement and maybe even 10-20% more since people dont see an out for VMW and see our leadership as not being able to actually right the ship...
Now you have RSUs that are worth 30, 40 or 50% less than they were. Execs whos comp (heavy in stock) just got rocked, and no one really looking to buy us at that point...
Guess what? within 6 months you have a new CEO, new SVPs, huge re-orgs, and someone like TK (former broadcom now CSG/TIBCO) put in a position to reshape the company without the benefit of an acquisition for the employees...
You dont like it now. you Will HATE IT if this deal gets cancelled.
Great call-out on FTC, 1gpp+1l7fDvwl.
I just checked. This looks like a "Hail Mary" play by the FTC.
Here's the article: https://www.wsj.com/articles/federal-trade-commission-lina-khan-federal-judge-meta-within-unlimited-virtual-reality-11675723824?st=selgey6ny8ceix3&reflink=article_copyURL_share
If you think vmware is harmed by the merger, just see how bad a failed will be.
VMWare will be like the girl who was left at the altar. No one will want her.
The stink of a failed merger will destroy the company. BC's offer was what, 30% above par at the time? The stock will see that price again, and even lower.
Who cares you say! I don't own much stock, so it won't effect me. WRONG!
If the merger fails, it's not like the company will just decide to forget all about it and just continue as normal. "Sorry about that! Let's hire everyone back. And here's an EPIC day too!"
Nope, the company will be desperate to sell. And the price will be hugely reduced. And they'll sell it off in parts and pieces. M.Dell and them are ready to cash out, they are done with this business. So they will take any offer. And we employees will be the worse for it.
If the merger fails, we will see all the cuts that BC promised, and none of the positives. Think a lot of people left after the merger announcement? Just wait until the merger fails!
And who here thinks Magoo has the...vision...to properly run this company? Mr fashion disaster was put into his role for one reason. As interim, to help the merger along. It was never meant to last forever. With no merger, who in holy he-l would want him as permanent CEO? I doubt he even wants that!
No merge would be catastrophic.
From the Wall Street Journal:
Does Lina Khan (Head of FTC) ever win a case? In her latest embarrassment, a federal judge last week rebuked the Federal Trade Commission for not doing its homework and dismissed its attempt to block Meta’s acquisition of the virtual reality app developer Within Unlimited.
Look up Lina Khan’s background and you will see why on the offensive.
The Broadcom deal failing would be wonderful. It would take another two plus years of pay, bonuses, benefits, and more foolishness to sell VMW to someone else. And much of our leadership would leave. Broadcom is evil and VMW management obviously corrupt. Let us hope this falls through.
Actually, the merger not happening should be more confidence inspiring
than the other way around...
Why do you think that?
Dell signaled that he wants little to do with the company, except
for taking all the extra cash value.
If the merger fails, Dell will find others willing to buy pieces of the company.
For example,
Tanzu goes to Tata
EUC goes to Oracle
ESX goes to IBM
Vsphere goes to Yahoo Japan
Workstation to AWS
Vsphere on AWS goes to Infosys.
It doesn't need to make sense. It needs to make Dell money.
The merger not happening will ki-l the stock price for a long time.
"which isn't very confidence inspiring. "
Actually, the merger not happening should be more confidence inspiring than the other way around...
Link that avoids paywall
https://12ft.io/proxy?q=https%3A%2F%2Fseekingalpha.com%2Fnews%2F3934887-vmw-stock-drops-on-report-ftc-talking-to-third-parties-in-broadcom-deal-review
I have no idea what this mean to make a lawsuit against the deal, but obviously it sounds pretty serious.
Suck on that Hock
So forgive me for not fully following here, surely these are standard checks and procedures for an acquisition of this scale and technology mix. Why would the acquisition fall through, the FTC checks alongside the wider UK and EU checks are standard, no?
This report seems to indicate that the FTC is looking to initiate a lawsuit and trying to "gather" signatures to strengthen their case to do exactly that, if so it seems they have already made up their mind on the course of action which isn't very confidence inspiring.
Thank you for sharing, OP. Leadership doesn’t communicate or address concerns.
Indicators seem to allude to this acquisition not happening. VMware hasn’t been the same since the announcement. The company needs to repair itself in order to compete. Current leadership isn’t capable of this.
I can’t see how this company can support my career at this point. Tough times.
Yikes!! FTC is on the offensive here...