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
TheStreet Open House

What's Going on With EMC?

Stocks in this article: EMC VMW

Many EMC investors like the company's investment in a large amount of the outstanding shares of VMware (VMW). According to Yahoo! Finance, EMC purchased last year, between April 25 and May 1, close to $35 million of VMC shares, bringing the total number of shares owned as of May 1 to over 43 million.

At the current market price of VMW shares at around $93, that would put EMC's total stake in VMW at close to $4 billion if my math serves me well. That would represent about 10% of VMware's $40 billion market cap.

Part of EMC's business involves offering VMware virtualization and cloud solutions that enable organizations to aggregate multiple servers, storage infrastructure, and networks together into shared pools of capacity that could be allocated to applications as needed. So EMC gets to double-dip (as an investor and a business partner) into the profitability of VMW and how it makes its money.

How much money VMW makes, including EPS and revenue will be disclosed when it announces fourth-quarter and full-year 2013 financial results after the market close on Tuesday. Shares closed Monday at $93.11 and are up 3.8% for the year to date.

With its recent strategic acquisitions and organic growth, VMW may guide analysts and investors towards a vision of a bigger and better growth trajectory for the company in the year ahead.

What does this mean for EMC?

If EMC doesn't show impressive numbers on Wednesday or fails to give encouraging forward guidance about the company, don't be surprised if activist investors look hard at the hidden value that EMC stock possesses with its VMW holdings and want changes made. These days these activist investors want companies to return more value to shareholders in the form of higher dividends and stock buybacks or they want assets spun off.

It isn't hard to imagine that EMC will at some point be hard-pressed to spinboff its less-profitable divisions or its shares of VMW to EMC's patient but weary investors. It's not a sure thing, but with institutions including  Vanguard Group owning close to 5% of the outstanding shares (as of Sept. 30, 2013), that scenario isn't farfetched.

At the time of publication the author had no positions in the companies mentioned in this article.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.


Marc Courtenay is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor of

Courtenay holds a Master's of Science degree in Psychology from California Polytechnic State University, and is a former senior vice-president of Investments for two major brokerage firms. He's been a fiercely independent investment "investigator" and a consulting contributor to the investment publishing world for over 30 years. In addition to his role as an investment publisher and analyst, he serves as a marketing consultant to the investment media industries.

In his role as a financial writer and editor, he specializes in unique investment strategies, growth with income stocks, overlooked investment themes, tax-advantaged themes, risk management, technologies to capture gains and reduce losses, real estate related opportunities,effective wealth preservation techniques, and the use of ETFs for diversification and asset allocation. He also follows and frequently writes about technology, health sciences, energy and resource companies. Because of his training and background in Clinical Counseling and Psychology, he enjoys writing about investor behavior, the herd mentality, how to turn investment mistakes into investment breakthroughs and the stock market's behavioral trends and patterns.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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!


DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

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