EMC Gets A Minor Roadblock At Its Multi-year Highs (EMC, VMW, MSFT)

EMC (EMC) shares are trading lower by 1% pre-market after Bear Stearns downgraded its Outperform rating to a ‘Peer Perform’ rating based on valuation and performance.  Shares are up some 80% from the lows of the year, almost unheard of for a tech giant of its size in a market where everything but tech seems to be the new focus.  Not only is the performance strong, but yesterday’s $17.00 close marked what was a high in more than the last 5-years.

Much of the recent performance is because of the upcoming spin-off IPO of its VMware (VMW) this summer.  This one was noted as a potential Microsoft chaser back in February and its IPO filing in April was eagerly greeted by Wall Street.  Just yesterday, R.W.Baird raised its previous $17.00 target up to $20.00.

CNNMoney.com is running something out of Fortune about the VMWare IPO.As soon as this summer, a Silicon Valley company called VMware will offer shares to the public for the first time in what could be the biggest and buzziest IPO in the hotbed of technology since Google went public in 2004.  Upon reading this, it really felt as though this should have been dated early-May or late-April because the filing was in late-April.

Downgrades on ‘Valuation’ and profit taking is quite normal after a large run to multi-year highs and is something that probably is easy to absorb by a market with a strong appetite for the name.

Jon C. Ogg
May 31, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.