Capital costs more than doubled. High quality corporate bond interest rates went from 2% to 6%. Leveraged Buyout doesn't make sense with the way interest rates went from 0.25% to 5.25%. 2100% increase. Market doubled the share price of avgo. The deal is a ripoff for avgo because of 50% stock. They should focus on AI. Not compete with Amazon and Google and MS for cloud. HT will find a way out of this mess.
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Who are these people who keep praying for the deal to close. Those who were expecting $215 for the shares. Now stuck not able to sell as the stock goes down?
ChatGPT release and AI mania started in Nov 2022. Vmw deal was in May 2022.
Who cones up with these weird narratives?
The whole point of buying VMWare is to expand Broadcom's patents, portfolio, and software stack into areas that will help them deploy more of their products like cyber, AI, mainframe, and cloud. With VMware they will have the ability to create the software that can actually run on their custom compute engines that can compete with Nvidia. Every VMware customer that wants to deploy AI will have the option to utilize Broadcom hardware. This boosts hock tan's revenue big time. Why else would hock want VMware so badly. All of his hardware products automatically support all of VMWare's hardware products. With the ability for the customer to choose.
He sure doesn't seem like he wants out. He's been very active in VMW business even yesterday.
Who leaked that China is blocking the deal to FT? Wondering how it is possible to leak such info in China?
This board leaked it like 20 times
Who leaked that China is blocking the deal to FT? Wondering how it is possible to leak such info in China?
I have to imagine Michael Dell wants his payday and will be doing whatever possible to get this deal to go thru. Lobbyists galore working back channels. HT has other incentives not widely published. I would be completely shocked if anyone walks away from the deal.
The stock price dipped to $142.55 this morning, as investors seem to agree that it no longer makes sense and the time has come to cut the losses from a prior investment.
I think Hock knows better than anyone using this site how to make a success of the acquisition, and he will do just that.
All offers are conditional including the buyout offer.
I don't think they would be sending out offer letters and going this far if they didn't intend to go through with the acquisition.
The China risk is real, i don't think the other factors are.
LBO doesn't make sense in higher forever interest rates regime. Sell stock and put it in money market. People should stop living in the past.
Don’t forget even if the deal doesn’t close they will have to provide VMware with 1.5 billion dollars as stated in the contract
Hock has to prime the pump every few years or his model collapses.
Not entirely true. BC financed its debt around 3,5% in the recent years. The. Never had rates around ~1% or below. So they are used to higher rates. Hock is financially disciplined and can work even with high rates.
But still can not judge for the China approval topic. That’s an entirely different story. No idea what that means or if that will cancel the merger.
Walking away the deal makes more economic sense to HT.
His ego prevents him doing that I'm afraid. His actions of the past few years clearly show this.