This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

EMC Hears Dell's Footsteps

SAN FRANCISCO -- Shares of EMC (EMC - Get Report) tumbled on news that one of its largest customers may soon become one of its largest competitors.

Computer giant Dell (DELL - Get Report) announced plans Monday to acquire data storage gear maker EqualLogic, signaling its intention to develop homegrown data storage products rather than reselling EMC's as it does now.

What's more, the $1.4 billion price it paid for EqualLogic underscores Dell's aggressive approach to sell storage gear to small and mid-sized business, which have been a fast-growing segment of EMC's business.

EMC shares were recently down $1.07, or 4.4%, to $23.48 amid a selloff in the broad market. Earlier Monday, Goldman Sachs analyst Laura Conigliaro downgraded the stock, citing primarily valuation concerns, as well as possible competition from the Dell announcement.

EMC shares have doubled in the past seven-and-a-half months.

Over the last year, Dell has become one of the biggest buyers of EMC equipment. At the end of the June quarter, Dell accounted for about 15% of EMC's total revenue, up roughly 11% a year earlier.

Both EMC and Dell said that their relationship remains intact and that the EqualLogic storage gear won't replace purchases Dell makes from EMC. In 2006, the two companies extended their relationship through 2011.

But the deal will put the two squarely in competition for customers on the lower end of the market.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DELL $0.00 0.00%
EMC $28.94 0.00%
IBM $161.94 0.00%
HPQ $34.84 0.00%
AAPL $128.46 0.00%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs