It’s been more than a month since EMC announced that it will be acquired by Dell for about $33.13/share. However, EMC shares continue to trade about 24 percent below the proposed buyout price.

In a new report, A.B. Bernstein analyst A.M. Sacconaghi, Jr. took a closer look at what’s going on with EMC.

VMware Pullback

The majority of EMC’s sluggish price action is likely due to the weakness in VMware’s stock since the announcement of the deal. More than 27 percent of the proposed $33.13/share EMC valuation when the Dell deal was announced came from the 0.11 shares of VMware tracking stock included in the deal for every share of EMC stock.

However, VMware shares are down more than 18 percent since the deal was announced on fears surrounding Dell’s influence on the company moving forward. Under the terms of the proposal, Dell would own less than 30 percent of VMware, but would control 97 percent of voting power.

EMC Still Undervalued

Even with the weakness in VMware factored in, EMC remains…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!