Blade Watch

http://news.com.com/VMware+IPO+could+raise+100+million/2100-1012_3-6180017.html

EMC subsidiary VMware could raise as much as $100 million in its initial public offering of stock, the virtualization specialist said in a regulatory filing.

Earlier this year, EMC announced the VMware IPO plan, saying the move would “unlock VMware value” for EMC shareholders and make it easier for VMware to attract and retain good employees. The company said it would sell only about 10 percent of VMware stock, retaining control.EMC reiterated that rationale this week, but added in the 153-page filing some detail that wasn’t previously available–for example, VMware’s profitability. EMC earlier had shared only VMware’s quarterly revenue when reporting financial results.

VMware had net income of $87 million on revenue of $704 million last year. In 2005, it had net income of $67 million on revenue of $387 million. In 2004, its $219 million in revenue produced $17 million in net income.

The forthcoming IPO of VMWare will be of great interest to the market, and I watch with interest, it could bring a great revenue stream for EMC allowing it to focus some investment in some key businesses/offerings. We’ll need to see how the market responds to this and what the actual value of the stock will be.

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