VMware files prospectus for IPO

Company files Form S-1 Registration Statement with the U.S. Securities and Exchange Commission

New details have emerged of virtualisation software provider, VMware's, plans to sell its stock to the public.

VMware, a subsidiary of storage vendor, EMC, filed details of its plans to sell 10 per cent of its stock with the US Securities and Exchange Commission (SEC).

According to the filing, VMware will have two classes of stock. EMC will hold 32.5 million shares of Class A and all 300 million shares of Class B. The combined A and B shares are 332.5 million, so if 10 per cent are to be sold to the public, that would mean 3.325 million Class A shares could be traded. However, EMC spokesman Michael Gallant said that was only an estimate.

EMC will have 10 votes for each of its B shares while Class A holders will have one vote per share. This voting structure was common in situations where a parent company wanted to spin off part of a subsidiary in an Initial public offering (IPO), yet retain control over it, Gallant said.

"Given that EMC owns all the Class B shares, EMC will be the majority shareholder, enabling it to control the board of director election. This is [the] structure used in a "carve out" situation, enabling the parent company to continue to maintain control over the subsidiary, yet provide a market for the stock of the subsidiary," Gallant said in an email.

Although the prospectus, called an S-1 filing, states that the IPO is expected to raise $US100 million, Gallant cautioned that figure was just a placeholder number and could change later. The filing also does not identify a per-share price at which VMware stock will be sold when the company goes public, sometime at midyear.

On February 7, EMC said when announcing the IPO that the funds would go to stock-based compensation for employees and to help EMC shareholders derive more value out of VMware's success.

The offering would unlock more of VMware's value for EMC shareholders, and help the company retain and attract the software industry's top talent, EMC chairman, president and CEO, Joe Tucci, said at the time.

In releasing its first-quarter 2007 financial results on April 17, EMC noted that VMware was the fastest growing of its product lines, with sales up 95 per cent to $US256 million compared to $US131 million in the same quarter of 2006.

The IPO should attract considerable market attention given VMware's dominance of the virtualisation field, an industry analyst at S&P Equity Research, Jawahar Hingorani, said.

"If you look at the way that thing is growing you can get an idea that this [IPO] will be fairly well anticipated," Hingorani said.

VMware was founded in 1998 and acquired by EMC in 2004 for $US635 million. virtualisation software increases the utilisation of servers by allowing multiple versions of software or operating systems to run simultaneously on the same server hardware.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Robert Mullins

IDG News Service
Show Comments

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?