Foreign Tuffett Posted February 1, 2018 Share Posted February 1, 2018 DELL can't buy VMW or force a reverse merger w/o the "majority of the minority" VMW shareholders agreeing - so they can't screw VMW shareholders. It's debatable if they can or will screw DMVT - but that's something to keep in mind with all this noise. I like DMVT here a lot. ($71) Have you read the "Risk Factors" section of VMW's most recent 10-K? If not, I would strongly recommend that you do so. Link to comment Share on other sites More sharing options...
given2invest Posted February 3, 2018 Share Posted February 3, 2018 DELL can't buy VMW or force a reverse merger w/o the "majority of the minority" VMW shareholders agreeing - so they can't screw VMW shareholders. It's debatable if they can or will screw DMVT - but that's something to keep in mind with all this noise. I like DMVT here a lot. ($71) Have you read the "Risk Factors" section of VMW's most recent 10-K? If not, I would strongly recommend that you do so. Yes, there is a $15B market cap of DVMT that's really worth 0 - if only all those folks had read the risk section of the 10-k. Oh and many of those shareholders are the world's savviest investors. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted February 4, 2018 Share Posted February 4, 2018 DELL can't buy VMW or force a reverse merger w/o the "majority of the minority" VMW shareholders agreeing - so they can't screw VMW shareholders. It's debatable if they can or will screw DMVT - but that's something to keep in mind with all this noise. I like DMVT here a lot. ($71) Have you read the "Risk Factors" section of VMW's most recent 10-K? If not, I would strongly recommend that you do so. Yes, there is a $15B market cap of DVMT that's really worth 0 - if only all those folks had read the risk section of the 10-k. Oh and many of those shareholders are the world's savviest investors. Who said it was worth $0? Those are your words, not mine. I don't know what's going to happen with DVMT. Probably no one does. All I was trying to say is that there are multiple ways for Michael Dell and Silver Lake to pull the rug out from under DVMT investors. Caveat emptor. Link to comment Share on other sites More sharing options...
given2invest Posted February 5, 2018 Share Posted February 5, 2018 DELL can't buy VMW or force a reverse merger w/o the "majority of the minority" VMW shareholders agreeing - so they can't screw VMW shareholders. It's debatable if they can or will screw DMVT - but that's something to keep in mind with all this noise. I like DMVT here a lot. ($71) Have you read the "Risk Factors" section of VMW's most recent 10-K? If not, I would strongly recommend that you do so. Yes, there is a $15B market cap of DVMT that's really worth 0 - if only all those folks had read the risk section of the 10-k. Oh and many of those shareholders are the world's savviest investors. Who said it was worth $0? Those are your words, not mine. I don't know what's going to happen with DVMT. Probably no one does. All I was trying to say is that there are multiple ways for Michael Dell and Silver Lake to pull the rug out from under DVMT investors. Caveat emptor. Yes - I'm aware - and thus the 42% discount. If they want to screw you, they can probably screw you. I used the "0" as a price target only to show, with hyperbole, that there is a big middle ground where you can get "screwed" and still have DVMT worth more than it's trading for. 42% discount. btw if you read the risk section in most 10k's it would scare the crap out of you ;) Link to comment Share on other sites More sharing options...
Gordon Gecko Posted April 16, 2018 Share Posted April 16, 2018 Why the muted reaction to today's news? Seems very positive for DVMT? Link to comment Share on other sites More sharing options...
jrallen81 Posted April 16, 2018 Share Posted April 16, 2018 I bought some. Go tell your friends to buy some too! Link to comment Share on other sites More sharing options...
given2invest Posted April 16, 2018 Share Posted April 16, 2018 Why the muted reaction to today's news? Seems very positive for DVMT? Still have tons of "unknowns". If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices. What will DVMT do on the announcement of an IPO? Probably go down even though it shouldn't. DELL could also reverse merge into DVMT. What would the valuation be? If DELL does this, he will steal most of the ~15b discount DVMT offers. And he could do nothing and remain status quo. I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT. Link to comment Share on other sites More sharing options...
Gordon Gecko Posted April 16, 2018 Share Posted April 16, 2018 1.) I fail to see why I forced conversion at a meaningful premium would drive down the price. If anything, you'd think it would firm up a valuation floor? 2.) The reverse merger through DVMT not only doesn't address Dell's cash needs, but it also makes no sense (to me, anyway). If Dell is going to benefit at the expense of someone else, it would have to be through some mechanism that exchanges outside money for Dell/EMC legacy business at a premium to intrinsic value. In what world would he be able to raise equity through the tracking stock structure (which is already hated) to reverse merge into Dell/EMC - all based on a consultant valuation??? And even if they did, I'm not sure SLP would get the exit multiple they'd be hoping for. Why the muted reaction to today's news? Seems very positive for DVMT? Still have tons of "unknowns". If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices. What will DVMT do on the announcement of an IPO? Probably go down even though it shouldn't. DELL could also reverse merge into DVMT. What would the valuation be? If DELL does this, he will steal most of the ~15b discount DVMT offers. And he could do nothing and remain status quo. I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT. Link to comment Share on other sites More sharing options...
given2invest Posted April 18, 2018 Share Posted April 18, 2018 1.) I fail to see why I forced conversion at a meaningful premium would drive down the price. If anything, you'd think it would firm up a valuation floor? Because it's all market psychology/sentiment. DVMT will not be anchored w/ VMW. And DELL would be able to convert DVMT at any time with the benefit of hindsight. 2.) The reverse merger through DVMT not only doesn't address Dell's cash needs, but it also makes no sense (to me, anyway). If Dell is going to benefit at the expense of someone else, it would have to be through some mechanism that exchanges outside money for Dell/EMC legacy business at a premium to intrinsic value. In what world would he be able to raise equity through the tracking stock structure (which is already hated) to reverse merge into Dell/EMC - all based on a consultant valuation??? And even if they did, I'm not sure SLP would get the exit multiple they'd be hoping for. DELL has many needs. It has a tax basis issue w/ VMW stock as well. The ultimate end game will be to combine with VMW to eliminate the tax basis issue. However, the $15 Billion in free money is housed at DVMT - not VMW. If they can't combine w/ VMW now, it doesn't mean they have no interest in that $15 Billion. Further, it would clean up the story a bit eliminating the tracker. It would also allow DELL to be publicly traded, with a cleaner story, and would be eligible for indexes. I don't think the old DVMT and how it trades is applicable to what the new DVMT would do if there was a r/m into it. Why the muted reaction to today's news? Seems very positive for DVMT? Still have tons of "unknowns". If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices. What will DVMT do on the announcement of an IPO? Probably go down even though it shouldn't. DELL could also reverse merge into DVMT. What would the valuation be? If DELL does this, he will steal most of the ~15b discount DVMT offers. And he could do nothing and remain status quo. I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT. Link to comment Share on other sites More sharing options...
Gordon Gecko Posted April 19, 2018 Share Posted April 19, 2018 That line of logic doesn't hold - take it to its extreme, and it implies that DVMT has 0 market value. Clearly there are multiple conversion/convergence mechanisms to exchange DVMT for VMW, so there will always be a reference. Further, a reverse merger through DVMT would have to be done by issuing equity through the tracker to pay a consideration for legacy Dell. I think you're insane to think that capital markets would subscribe to an equity offer through that instrument to purchase Dell/EMC based on an assessed value (from consultants hired by Dell, no less!) Michael Dell is a business man, not a fantasist. So you're right that 'new' DVMT wouldn't trade the same way, but the chances of that happening seem slim to none. 1.) I fail to see why I forced conversion at a meaningful premium would drive down the price. If anything, you'd think it would firm up a valuation floor? Because it's all market psychology/sentiment. DVMT will not be anchored w/ VMW. And DELL would be able to convert DVMT at any time with the benefit of hindsight. 2.) The reverse merger through DVMT not only doesn't address Dell's cash needs, but it also makes no sense (to me, anyway). If Dell is going to benefit at the expense of someone else, it would have to be through some mechanism that exchanges outside money for Dell/EMC legacy business at a premium to intrinsic value. In what world would he be able to raise equity through the tracking stock structure (which is already hated) to reverse merge into Dell/EMC - all based on a consultant valuation??? And even if they did, I'm not sure SLP would get the exit multiple they'd be hoping for. DELL has many needs. It has a tax basis issue w/ VMW stock as well. The ultimate end game will be to combine with VMW to eliminate the tax basis issue. However, the $15 Billion in free money is housed at DVMT - not VMW. If they can't combine w/ VMW now, it doesn't mean they have no interest in that $15 Billion. Further, it would clean up the story a bit eliminating the tracker. It would also allow DELL to be publicly traded, with a cleaner story, and would be eligible for indexes. I don't think the old DVMT and how it trades is applicable to what the new DVMT would do if there was a r/m into it. Why the muted reaction to today's news? Seems very positive for DVMT? Still have tons of "unknowns". If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices. What will DVMT do on the announcement of an IPO? Probably go down even though it shouldn't. DELL could also reverse merge into DVMT. What would the valuation be? If DELL does this, he will steal most of the ~15b discount DVMT offers. And he could do nothing and remain status quo. I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT. Link to comment Share on other sites More sharing options...
given2invest Posted April 19, 2018 Share Posted April 19, 2018 not the first time i've been called insane - we'll see! Link to comment Share on other sites More sharing options...
chesko182 Posted May 18, 2018 Share Posted May 18, 2018 https://www.sec.gov/Archives/edgar/data/1571996/000157199618000016/a8-kformay2018.htm Link to comment Share on other sites More sharing options...
gfp Posted July 1, 2018 Share Posted July 1, 2018 https://www.cnbc.com/2018/07/01/dell-to-acquire-tracking-stock-leave-vmware-alone-for-the-time-being.html https://www.wsj.com/articles/dell-nears-deal-to-swap-out-dvmt-tracking-stock-1530472720 Link to comment Share on other sites More sharing options...
chesko182 Posted July 3, 2018 Share Posted July 3, 2018 Well this is looking like an interesting workout, especially with the cash election which offers an 18.5% return in 6 months, assuming you are paid in cash (there's a $9bn cap from the VMW dividend) AND that it passes the shareholder vote (a big if...) there's a chance some activists may get involved in this and push for a higher premium (elliott..!?!) Of course MD is taking shareholders out at a huge discount to VMW stock, and this was always a risk to this trade. I sold last year at a nice profit but thinking about coming back in now that there's a hard catalyst. Any thoughts on the value of Dell stock that one would receive alternatively? Link to comment Share on other sites More sharing options...
given2invest Posted July 3, 2018 Share Posted July 3, 2018 Guess I'm insane! That line of logic doesn't hold - take it to its extreme, and it implies that DVMT has 0 market value. Clearly there are multiple conversion/convergence mechanisms to exchange DVMT for VMW, so there will always be a reference. Further, a reverse merger through DVMT would have to be done by issuing equity through the tracker to pay a consideration for legacy Dell. I think you're insane to think that capital markets would subscribe to an equity offer through that instrument to purchase Dell/EMC based on an assessed value (from consultants hired by Dell, no less!) Michael Dell is a business man, not a fantasist. So you're right that 'new' DVMT wouldn't trade the same way, but the chances of that happening seem slim to none. 1.) I fail to see why I forced conversion at a meaningful premium would drive down the price. If anything, you'd think it would firm up a valuation floor? Because it's all market psychology/sentiment. DVMT will not be anchored w/ VMW. And DELL would be able to convert DVMT at any time with the benefit of hindsight. 2.) The reverse merger through DVMT not only doesn't address Dell's cash needs, but it also makes no sense (to me, anyway). If Dell is going to benefit at the expense of someone else, it would have to be through some mechanism that exchanges outside money for Dell/EMC legacy business at a premium to intrinsic value. In what world would he be able to raise equity through the tracking stock structure (which is already hated) to reverse merge into Dell/EMC - all based on a consultant valuation??? And even if they did, I'm not sure SLP would get the exit multiple they'd be hoping for. DELL has many needs. It has a tax basis issue w/ VMW stock as well. The ultimate end game will be to combine with VMW to eliminate the tax basis issue. However, the $15 Billion in free money is housed at DVMT - not VMW. If they can't combine w/ VMW now, it doesn't mean they have no interest in that $15 Billion. Further, it would clean up the story a bit eliminating the tracker. It would also allow DELL to be publicly traded, with a cleaner story, and would be eligible for indexes. I don't think the old DVMT and how it trades is applicable to what the new DVMT would do if there was a r/m into it. Why the muted reaction to today's news? Seems very positive for DVMT? Still have tons of "unknowns". If DELL does regular IPO, they can force conversion at 20/15/10% premiums to trading prices. What will DVMT do on the announcement of an IPO? Probably go down even though it shouldn't. DELL could also reverse merge into DVMT. What would the valuation be? If DELL does this, he will steal most of the ~15b discount DVMT offers. And he could do nothing and remain status quo. I'm still very long DVMT as I think all 3 of these outcomes will be fine for DVMT. Link to comment Share on other sites More sharing options...
Ahab Posted July 3, 2018 Share Posted July 3, 2018 I'm considering going long the $95 Jan '19 calls, which really took a beating today. Curious what others thoughts are on the probability of this deal actually going through at $109.. Link to comment Share on other sites More sharing options...
given2invest Posted July 3, 2018 Share Posted July 3, 2018 I think a bump is coming. I'm too lazy to explain why again (I wrote a lot about it on VIC). Be careful with any options post Oct cause if/when deal goes through they will get funky with the election of cash/stock. Link to comment Share on other sites More sharing options...
given2invest Posted July 3, 2018 Share Posted July 3, 2018 Andrew sums it all up wonderfully. http://www.yetanothervalueblog.com/2018/07/some-thoughts-on-getting-screwed-by.html Link to comment Share on other sites More sharing options...
Ahab Posted July 3, 2018 Share Posted July 3, 2018 That was an interesting read! Thanks for the words of caution re playing this with options. Link to comment Share on other sites More sharing options...
HJ Posted July 3, 2018 Share Posted July 3, 2018 https://www.wsj.com/articles/carl-icahn-unlikely-to-push-dell-for-a-better-deal-1530651586?mod=hp_lista_pos4 Link to comment Share on other sites More sharing options...
Liberty Posted July 5, 2018 Share Posted July 5, 2018 http://www.yetanothervalueblog.com/2018/07/some-dvmt-updates-and-additional.html Link to comment Share on other sites More sharing options...
given2invest Posted July 5, 2018 Share Posted July 5, 2018 I agree w/ Andrew completely on all of this. Link to comment Share on other sites More sharing options...
Gordon Gecko Posted July 7, 2018 Share Posted July 7, 2018 Guess I'm insane! Eh? He didn't go the IPO route? Link to comment Share on other sites More sharing options...
given2invest Posted July 8, 2018 Share Posted July 8, 2018 Guess I'm insane! Eh? He didn't go the IPO route? google.com Link to comment Share on other sites More sharing options...
RAFA1989 Posted July 17, 2018 Share Posted July 17, 2018 Bloomberg is out with a new piece on DVMT https://www.bloomberg.com/view/articles/2018-07-17/dell-dvmt-vmw-buyout-math-doesn-t-compute Link to comment Share on other sites More sharing options...
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