Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

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

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!