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 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

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!