VMware (NYSE:VMW) is on of the stocks that no one seems to get enough of. Part of the reason is more than easy to figure out, because virtualization is the next "Next Thing" and next buzzword for investors.
But there does exist this stock conundrum because of the EMC Corp. (NYSE:EMC) relationship and ownership. The float is tiny, so it takes a far lower amount of money in and out of this stock to manipulate the price of a $25 Billion market cap. To top it off, we noted earlier how investors are starting to use out of the money stock options as a manner of gathering exposure to the company. While it is risky and while many of the strike prices may expire worthless, it is too hard to blame anyone for using a stock option to play the stock. We just noted how this new $90 target from an analyst may be hard to justify, but this stock does have a mind of its own.
The VMWORLD CONFERENCE 2007 in San Francisco was a big catalyst for the company. VMware even announced an acquisition of a private virtualization company after less than a month of being public. That is good, because the company has a whole lot of market cap to grow into. It cannot justify that market cap entirely on its own, so more partnerships and acquisitions would make sense.
But interestingly enough, there are some more virtualization conferences coming up. There was a release out yesterday showing the InfoWorld Virtualization Executive Forum at the end of this month.
What’s good about this is now virtualization is on the map, and this one is in New York closer to the analysts and fund managers that may be looking for other ways to invest in the sector. VMware also today announced the first annual VMworld Europe conference in Cannes, France from 26th-28th February 2008.
There are many developments in this space and virtualization is going to be helped by cheaper and cheaper RAM and multi-core processing power. Now the company itself has to demonstrate that its stock is worth the $25 Billion on paper.
Jon C. Ogg
September 13, 2007
Jon Ogg can be reached at email@example.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.