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Alex Cho

EMC Had A Bad Quarter, But So What?

EMC had a bad quarter, so what? It doesn’t change the fact that Dell is willing to pay a cool $67 billion for them. Time to buy up the stock on deal value arbitrage.

Here’s what UBS analyst Steven Milunovich had to say:

1Q/16 revenue of $5.5bn was below consensus of $5.6bn due to $75mn of unshipped storage orders that came in late in the quarter. Since the Dell deal calls for investors to get $24.05/share in cash and 0.111 shares of a new VMware tracking stock, the results from EMC's core storage business are less important to the stock. VMware's announced $1.2bn buyback and 9% after hours jump should help EMC's stock.

Assuming the deal goes through, I’m assuming the stock is worth roughly $30 to $35 depending on the value VMware as we progress through the year.

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