VMware IPO Debut Dazzles

Updated from 12:27 p.m. EDT

SAN FRANCISCO -- VMware(VMW Quote) didn't disappoint investors who got their hands on the new issue Tuesday.

The stock got off to a quick high of $55 in its first trading day, and closed at $51 -- well above its initial public offering pricing of $29 late Monday.

Trading volume was heavy at 26.8 million shares, especially considering only 33 million IPO shares debuted Tuesday.

"This is a big day for us," said VMware CFO Mark Peek. "We look it as the start of a new era for VMware and virtualization. We're really excited for all the people at VMware, all our partners in the industry and our customers."

The offering by parent company EMC(EMC Quote), which is keeping an 89% stake, is considered a recruiting tool for new talent. VMware has a large number of openings for software developers.

"We've already seen an effect, once it was known we'd be going public," Peek added.

"We really think the market segment is in the early stages, and it's the time for us to invest in virtualization and the adjacent platforms," Peek said. "We'll invest and try to hire the very highest-quality caliber people" as the company expands its offerings.

EMC acquired VMware in 2004 for $625 million. It must retain a controlling stake for five years to avoid hitting EMC shareholders with a taxable gain on the acquisition.