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VMW - VMWare IPO preliminary set to start trading on August 6

Virtualization is probably the biggest IT thing since Novell's Netware in the early 1980's

Intel to Buy $218.5M Stake in VMware

http://biz.yahoo.com/ap/070709/intel_vmware_investment.html?.v=1

After VMware completes its initial public offering, Intel will own approximately 2.5 percent of the outstanding shares of VMware.

VMware IPO could raise $1.1bn
By Kevin Allison in San Francisco
Financial Times
Updated: 9:41 p.m. CT July 9, 2007

VMware, the fast-growing software maker, could be worth nearly $10bn after its flotation, according to filings with US regulators.

The company, which is controlled by EMC, the world's biggest maker of data storage equipment, said on Monday in a filing with the Securities and Exchange Commission that it expected to sell up to 37.95m shares at $23 to $25 apiece in its initial public offering.

It also announced that Intel, the world's biggest chipmaker, had agreed to buy 9.5m shares at $23 a piece, for a total investment of $218.5m.

Together, the share sales could raise as much as $1.1bn in what may become the most closely watched technology IPO since Google, the internet search engine, floated in 2004.

EMC is expected to retain an 89 per cent stake in VMware after the flotation, which is set to be "as soon as practicable", according to Monday's filing.

A spokesman for VMware declined further comment on its IPO plans, citing the government-imposed "quiet period" that precedes a public offering. The expected VMware IPO comes amid increasing interest in technology IPOs.

The buoyant market has led several loss-making companies to float in recent months, a practice that dropped off sharply following the dotcom bust.

The debutantes include Infinera, a maker of optical networking equipment, whose shares have risen more than 23 per cent since they made their debut last month in spite of the fact that the company made a net loss of almost $20m in the first quarter.

Other recent tech IPOs include Limelight Networks, a content delivery company, whose shares have shot up 16 per cent since they floated last week, and Data Domain, a storage company whose shares have increased more than 19 per cent since last week.

VMware is a leader in "virtualisation" software, which allows companies to spread computing tasks across more than one machine. Virtualisation has emerged as one of the leading growth areas of the business software market as companies look for ways to increase their computing power while cutting down on information technology costs.

VMware's sales doubled to $258.7m last quarter, adding to a string of bumper results that are expected this year to make it the fastest software company ever to reach $1bn in annual sales.

The company made a profit last quarter of $41.1m, an increase of 15.9 per cent over the year before.

EMC, which has operated VMware as an independent subsidiary since its acquisition in 2004, has said it plans to hold on to about 90 per cent of the company for at least two years.

In the wake o the IPO, EMC will control about 99 per cent of the company's voting shares.

EMC's shares retreated 0.4 per cent on Monday to close at $18.59.