Elliott Management Acquires Huge Stakes in EMC Corporation (EMC) To Pursue the Spin-off of VMware, Inc (VMW)

Activist investor Elliott Management, headed by billionaire Paul Singer has acquired shares worth more than $1 billion in the cloud-storage company EMC Corporation (NYSE:EMC). Elliott plans to push EMC Corporation (NYSE:EMC) into spinning-off its virtualization software unit, VMware, Inc (NYSE:VMW), in which EMC Corporation (NYSE:EMC) holds an 80% stake.

CNBC’s David Faber reported that Elliott Management’s stake in EMC Corporation (NYSE:EMC) roughly amounts to 2% of the outstanding shares of the company, making Elliott a significant investor in the company. In the past Elliott has targeted some prominent names like Juniper Networks, Inc (NYSE:JNPR), Hess Corp. (NYSE:HES) and BMC Software, Inc (NASDAQ:BMC) but EMC Corporation (NYSE:EMC) represent one of its biggest target.

EMC Corporation (NYSE:EMC)

“The key here is, the focus is they [EMC Corporation (NYSE:EMC)] own 80% of VMware, Inc (NYSE:VMW) it being held back by being owned within EMC Corporation (NYSE:EMC) [...] and the multiple is much lower than it otherwise would be. Tucci is retiring, that is the CEO of the company in February of next year, he is 66-years old. They believe there are a lot of strategic acquirers for the business for spinning out VMware, Inc (NYSE:VMW) and what’s left and so they are going at it. They [Elliott Management] believe they have the support of other larger shareholders,” Mr. Faber said in his report.

EMC Corporation consists of several units: Pivotal, its software development unit; RSA, a network security services provider; and VMware, Inc (NYSE:VMW). The company’s stock rose  by 94% over the last five years.

Speaking about the effectiveness of activist investors like Elliott Management, Mr. Faber said: “When you see activists in a stock, they are most effective when they are already being prodded on by large owners, who typically do not take activist stances in-part because they don’t want to jeopardize their 401K business”.

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!