Author Topic: DVMT - VMW Tracking Stock  (Read 22119 times)

Gordon Gecko

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Re: DVMT - VMW Tracking Stock
« Reply #30 on: April 16, 2018, 12:00:24 PM »
Why the muted reaction to today's news? Seems very positive for DVMT?


jrallen81

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Re: DVMT - VMW Tracking Stock
« Reply #31 on: April 16, 2018, 01:11:41 PM »
I bought some. Go tell your friends to buy some too!

given2invest

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Re: DVMT - VMW Tracking Stock
« Reply #32 on: April 16, 2018, 02:09:46 PM »
Why the muted reaction to today's news? Seems very positive for DVMT?

Still have tons of "unknowns".  If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices.  What will DVMT do on the announcement of an IPO?  Probably go down even though it shouldn't.

DELL could also reverse merge into DVMT.  What would the valuation be?  If DELL does this, he will steal most of the ~15b discount DVMT offers.

And he could do nothing and remain status quo.  I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT.

Gordon Gecko

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Re: DVMT - VMW Tracking Stock
« Reply #33 on: April 16, 2018, 02:31:18 PM »
1.) I fail to see why I forced conversion at a meaningful premium would drive down the price. If anything, you'd think it would firm up a valuation floor?

2.) The reverse merger through DVMT not only doesn't address Dell's cash needs, but it also makes no sense (to me, anyway). If Dell is going to benefit at the expense of someone else, it would have to be through some mechanism that exchanges outside money for Dell/EMC legacy business at a premium to intrinsic value. In what world would he be able to raise equity through the tracking stock structure (which is already hated) to reverse merge into Dell/EMC - all based on a consultant valuation??? And even if they did, I'm not sure SLP would get the exit multiple they'd be hoping for.



Why the muted reaction to today's news? Seems very positive for DVMT?

Still have tons of "unknowns".  If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices.  What will DVMT do on the announcement of an IPO?  Probably go down even though it shouldn't.

DELL could also reverse merge into DVMT.  What would the valuation be?  If DELL does this, he will steal most of the ~15b discount DVMT offers.

And he could do nothing and remain status quo.  I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT.

Value^2

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Re: DVMT - VMW Tracking Stock
« Reply #34 on: April 17, 2018, 09:02:41 PM »
Michael Dells worst nightmare coming true.
Carl Icahn buys stake in software provider VMware
https://www.reuters.com/article/us-vmware-icahn-stake/carl-icahn-buys-stake-in-software-provider-vmware-cnbc-idUSKBN1HP0C7


Dell was just recently in court arguing that 2013 buyout was fairly priced. I hope all those same arguments will be haunting him when if he tries to merge with vmwre.   

Court reverses Dell buyout ruling that alarmed dealmakers
https://www.reuters.com/article/us-dell-buyout-lawsuit/court-reverses-dell-buyout-ruling-that-alarmed-dealmakers-idUSKBN1E82JA

given2invest

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Re: DVMT - VMW Tracking Stock
« Reply #35 on: April 18, 2018, 08:40:54 AM »
1.) I fail to see why I forced conversion at a meaningful premium would drive down the price. If anything, you'd think it would firm up a valuation floor?

Because it's all market psychology/sentiment.  DVMT will not be anchored w/ VMW.  And DELL would be able to convert DVMT at any time with the benefit of hindsight.

2.) The reverse merger through DVMT not only doesn't address Dell's cash needs, but it also makes no sense (to me, anyway). If Dell is going to benefit at the expense of someone else, it would have to be through some mechanism that exchanges outside money for Dell/EMC legacy business at a premium to intrinsic value. In what world would he be able to raise equity through the tracking stock structure (which is already hated) to reverse merge into Dell/EMC - all based on a consultant valuation??? And even if they did, I'm not sure SLP would get the exit multiple they'd be hoping for.

DELL has many needs.  It has a tax basis issue w/ VMW stock as well.  The ultimate end game will be to combine with VMW to eliminate the tax basis issue.  However, the $15 Billion in free money is housed at DVMT - not VMW.  If they can't combine w/ VMW now, it doesn't mean they have no interest in that $15 Billion.  Further, it would clean up the story a bit eliminating the tracker.  It would also allow DELL to be publicly traded, with a cleaner story, and would be eligible for indexes.  I don't think the old DVMT and how it trades is applicable to what the new DVMT would do if there was a r/m into it.


Why the muted reaction to today's news? Seems very positive for DVMT?

Still have tons of "unknowns".  If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices.  What will DVMT do on the announcement of an IPO?  Probably go down even though it shouldn't.

DELL could also reverse merge into DVMT.  What would the valuation be?  If DELL does this, he will steal most of the ~15b discount DVMT offers.

And he could do nothing and remain status quo.  I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT.

Gordon Gecko

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Re: DVMT - VMW Tracking Stock
« Reply #36 on: April 19, 2018, 06:58:14 AM »
That line of logic doesn't hold - take it to its extreme, and it implies that DVMT has 0 market value. Clearly there are multiple conversion/convergence mechanisms to exchange DVMT for VMW, so there will always be a reference. 

Further, a reverse merger through DVMT would have to be done by issuing equity through the tracker to pay a consideration for legacy Dell. I think you're insane to think that capital markets would subscribe to an equity offer through that instrument to purchase Dell/EMC based on an assessed value (from consultants hired by Dell, no less!) Michael Dell is a business man, not a fantasist.

So you're right that 'new' DVMT wouldn't trade the same way, but the chances of that happening seem slim to none.

1.) I fail to see why I forced conversion at a meaningful premium would drive down the price. If anything, you'd think it would firm up a valuation floor?

Because it's all market psychology/sentiment.  DVMT will not be anchored w/ VMW.  And DELL would be able to convert DVMT at any time with the benefit of hindsight.

2.) The reverse merger through DVMT not only doesn't address Dell's cash needs, but it also makes no sense (to me, anyway). If Dell is going to benefit at the expense of someone else, it would have to be through some mechanism that exchanges outside money for Dell/EMC legacy business at a premium to intrinsic value. In what world would he be able to raise equity through the tracking stock structure (which is already hated) to reverse merge into Dell/EMC - all based on a consultant valuation??? And even if they did, I'm not sure SLP would get the exit multiple they'd be hoping for.

DELL has many needs.  It has a tax basis issue w/ VMW stock as well.  The ultimate end game will be to combine with VMW to eliminate the tax basis issue.  However, the $15 Billion in free money is housed at DVMT - not VMW.  If they can't combine w/ VMW now, it doesn't mean they have no interest in that $15 Billion.  Further, it would clean up the story a bit eliminating the tracker.  It would also allow DELL to be publicly traded, with a cleaner story, and would be eligible for indexes.  I don't think the old DVMT and how it trades is applicable to what the new DVMT would do if there was a r/m into it.


Why the muted reaction to today's news? Seems very positive for DVMT?

Still have tons of "unknowns".  If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices.  What will DVMT do on the announcement of an IPO?  Probably go down even though it shouldn't.

DELL could also reverse merge into DVMT.  What would the valuation be?  If DELL does this, he will steal most of the ~15b discount DVMT offers.

And he could do nothing and remain status quo.  I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT.

given2invest

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Re: DVMT - VMW Tracking Stock
« Reply #37 on: April 19, 2018, 09:40:39 AM »
not the first time i've been called insane - we'll see!

chesko182

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globalfinancepartners

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« Last Edit: July 01, 2018, 03:06:17 PM by globalfinancepartners »