This spinoff is still on track: Dell and VMware

Article Excerpt

DELL TECHNOLOGIES INC. $79 is a hold. The company (Nasdaq symbol DELL; Manufacturing sector; Shares outstanding: 749.8 million; Market cap: $59.2 billion; No dividend paid; Takeover Target Rating: Lowest; www.delltechnologies.com) still plans to spin off its 80.1% stake in VMWARE INC. $141. It is also a hold. VMWare (New York symbol VMW; Manufacturing sector; Shares outstanding: 419.8 million; Market cap: $59.2 billion; No dividend paid; Takeover Target Rating: Lowest; www.vmware.com) specializes in virtualization and cloud-computing software and services. VMware CEO Pat Gelsinger recently agreed to become the new CEO at Intel Corp. Even so, the move should have little impact on Dell’s aim to complete the spinoff before September 2021. The company would likely structure the transaction so that VMWare pays it a significant dividend. That would let Dell pay down its long-term debt of $43.3 billion (as of October 30, 2020). The amount represents a high 73% of its market cap. Dell and VMware are okay to hold. hold. …