Cisco Systems is unloading some of its stake in VCE, a joint venture with EMC that sells high-end data center gear, the companies announced Wednesday.
Terms of the deal weren t disclosed and analysts offered little comment on what this means for San Jose-based Cisco, which will retain about 10 percent of VCE. But some Wall Street experts seemed perplexed by Massachusetts-based EMC s desire to acquire more of VCE.
With EMC under pressure by shareholder Elliott Management to spin off its Palo Alto-based VMware chip operation, we view the Cisco/VCE news as a yawner given that EMC right now is facing a plethora of growth and strategic challenges and the last thing on investors s minds is the future of VCE, concluded FBR Capital Markets analyst Daniel Ives in a note to his clients.
Instead of worrying about VCE, Ives added, we hope the board and management team at EMC is evaluating the right ownership structure/a potential spin off of VMware as this topic remains at the epicenter of investor frustration and activism around the EMC story.
Photo by Paul Sakuma, AP