SiliconBeat

Intel sold 967,398 more shares of the 3.75 million shares of VMware it disclosed that it would sell in a filing on Nov. 3, bringing total sales under the plan to 2,365,524. The most recent sales were transacted between Dec. 5 and 12, and raised $23.2 million, as the shares sold at prices ranging from $23.26 to $24.50 per share.

Intel currently holds 6,143,476 shares of VMware shares, including the 1,384,476 shares that it still plans to sell.

VMware shares, which have lost 71 percent of their value since closing at $84.99 at the end of 2007, hit a low of $17.88 on Dec. 1.

Mendel Rosenblum, a VMware co-founder along with his wife and former chief executive Diane Greene, resigned his post Tuesday, according to a story posted Tuesday at virtualization.info.  The move was not a surprise, coming as it did two months after Greene, who led the company since its founding in 1998, was removed as CEO by the board the first week of July.

So why did it take so long for Rosenblum — described in the article as the “company visionary” — to quit after his wife was sacked, especially as the board had the temerity to offer him his wife’s seat on the board? Read the rest of this entry »

When asked by an analyst “Do you have a good sense for where morale is today?” among employees at VMware, its new chief executive, Paul Maritz, said the proposed option exchange “went a long way to addressing concern there.”

The question came up as part of the regular conference call the company conducted after releasing earnings Tuesday (which the filing incorrectly said took place Read the rest of this entry »

Remember back in August 2007, when VMware staged the most impressive initial public offering of a technology company since Google? The planned offering price for the 33 million shares it sold to the public for the first time was first estimated to be between $23 and $25, a range that was later raised to between $27 and $29. The shares finally went out at the top of the second range, and ended their first day at $51, up 76 percent.

In anticipation of the public offering, VMware directors authorized broad-based grants of options to employees totaling more than 35.6 million shares of stock with a price of $23.

Shares of VMware, which makes software to enhance the computing power and flexibility of servers, while controlling costs and energy consumption, soared to as high as $125 within less than three months of its debut. It was the best performing local IPO last year in the best year for initial offerings since 2000, the year the dot.com bubble burst.

That was then and this is now. Read the rest of this entry »

An index measuring the performance of recent initial public offerings soared 14.6 percent in April, “signficantly outperforming” the major indices, according to Renaissance Capital.
“The strong performance was driven by renewed interest in technology and growth stocks as the market began to show signs of life. Investors have begun to place bets on these stocks, which are now trading at bargain prices,” according to the release Renaissance put out on Friday.

Virtualization software provider VMware of Palo Alto was the second best-performing stockduring the period, with a 56 percent gain in its stock price. It was surpassed by Sirtri Pharmaceuticals, which rose 72 percent after announcing it was going to be acquired byGlaxoSmithKline for $720 million.

The top performing sector in April was communications, driven by renewed speculation of a
potential merger between Leap Wireless and MetroPCS.

As get-rich-quick schemes go, buying a boatload of VMware’s stock at a deep discount after its starmaking IPO is a pretty good one. Of course in this case the buyer, Intel, probably doesn’t really need the money. It’s probably more interested in having its ever-loving arms around the shoulder of the Valley’s favorite new crush.

On Tuesday, Intel of Santa Clara, filed a 13-D disclosing the size of its stock purchase in VMware. On August 23, Intel paid $218.5 million to buy 9.5 million shares, or 12.6 percent of VMware’s stock. That means that Intel paid $23 per share for the stock that closed at $70.20 that same day. You can’t find deals like that at the dollar store.

Intel had previously announced intentions to buy VMware stock back in July, but had not released the details.

So besides tripling its money in one day, what else does Intel get? As part of the deal, VMware must appoint an Intel executive to its board by the end of the month.  

It’s one day after the VMware IPO stoked nostalgia across Silicon Valley for the madness of 1999. And what do we have here? Somebody just bought a little Palo Alto company you never heard of for $500 million.

In an 8-K filed Wednesday, Citrix Systems of Fort Lauderdale, said it has acquired XenSource of Palo Alto for $500 million, a figure that is a mix of cash, stock, and the assumption of $107 million in debt. An analyst for The 451 Group, which closely follows tech M&A,  said the deal was a bid by Citrix to remain competitive with VMware:

“The purchase price of XenSource, the maker of Xen hypervisor, was undoubtedly inflated by the platinum valuation given to VMware. XenSource is currently running at little more than $1m in annual sales, though Citrix expects to push that to $50m next year. The Palo Alto, Calif.-based startup has raised some $38m in three rounds, starting with a $6m Series A in January 2005.”

But here’s where things get a little cozy. According to an 8-K filed on Wednesday by Citrix, the company disclosted that one of its directors, Steve Dow, also happens to be a general partner at Sevin Fosen funds, a venture firm in Palo Alto. Sevin just happens to be one of the leading investors in XenSource. Although Dow doesn’t directly have any money invested in XenSource, he will still receive his share of money that is allocated to all Sevin partners in the normal course of such things.

So much will Dow get? According to Citrix’s filing, Dow could get as much as $1.9 million from the deal. The company also notes that Dow did not attend the board meeting to approve the deal and did not cast a vote on it.

Some might say that EMC sold its VMware software division cheap Tuesday. The 33 million shares it offered to the public for the first time at $29 each, ended the day at $51, up 76 percent, meaning that some $726 million was left on the table for others to feast on.

That spare change would have been more than enough to reimburse EMC what it paid for the Palo Alto software company in January 2004 … about $625 million.

In fact, VMware borrowed $800 million from its parent back in April so it could make a dividend payment to EMC to help it “realize the increased value of its investment in us from the time of our acquisition by EMC.”

More than half of the net proceeds from VMware’s IPO will go to paying back $350 million of that debt, and to buy the $127 million new corporate headquarters that EMC built for the company on Hillview Avenue in Palo Alto.

EMC still owns roughly 87 percent of VMware, worth about $16.6 billion at the end of the stock’s first day of trading. Oh, and by the way, EMC shares closed down 3.7 percent Tuesday, and it ended the day worth $38.5 billion, about $1.5 billion less than the day before.

You win some, you lose some.