Many now glorify VMW because it is much better to work here than at Broadcom. However, we all know that VMW also has many issues. If this acquisition wasn't taking place, where do you think this company would be in 5 years? Do you think it wouldn't be on a downward trajectory?
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The company would fall apart regardless. There’s been no leadership in place since the spin-off. The culture has turned. Full of problem makers not solvers. Lots of tribes and backstabbing. There is little governance or even a unified vision that different groups can march towards. The behaviors showing up are also concerning. There’s no respect exchanged on a day to day. The company is eroding and all of this is independent of the acquisition. The good ones should be leaving.
We hv very weak management. Who only does lip service.There is a strict guidance on discounting most probably based on BC advice. However at a little threat from sales they capitulate.why the drama of creating this guidelines when u cant stick by it. Simple time waste
If the acquisition wasn't happening then our Q1 would not have the loss as great as it did. Our stock would have dropped 7 beyond the market. AVGO has exposed many flaws that we have including the fat and too many specialized teams. Having 7 people involved on a 2 product sale is 5 too many.
So VMware has too slim down no matter how the deal goes.
Prior to AVGO jumping in, VMW was trading in the mid $90s. The market hasn't been super great since then, up for awhile then down. VMW's current price of $116 is based on people assuming this deal will close. (But $116 is quite far from 142.50 so the market doesn't think this is a done deal yet.)
But let's say the deal gets blocked. VMW's $96/share was before the 1Q23 numbers came out which were not great, so if this deal doesn't happen, you can expect the stock to pretty instantly drop back into the $90s, maybe even $80s.
At that point VMW will still have $13B revenue with 38k employees, so still about 4X worse performance than many other tech companies. (Google has $250B revenue on 150k employees, etc.)
You gotta figure AVGO has awoken the PE giants, so if this deal doesn't go through, a similar one will, except this time it will be for $90/share and not $142.50. Whomever buys the company though will still want to run the AVGO playbook, except they can get $8.5B EBITDA on a $40B investment rather than a $61B.
In 5 years, without the acquisition, vmware would be on an increasing downward trajectory. Or, acquired by other venture capitalists that would further make it bleed money.
I'm an old-school enterprise tech guy. VMware has been the most positive working experience of my multi-decade career. Does VMware have its issues? Sure it does. But compared to some of the other places I have worked where the corporate culture was nasty and toxic, I will gladly accept those issues.
Some of the firms I have been with had a non-stop revolving door where once an employee realized what a negative experience the place was they would bolt at the first job offer. There is something quite simple that most large companies fail to grasp: That if you respect your employees and treat them nicely then the company will reap the rewards of having a loyal workforce who will create better work. Something that perhaps our potential future overlords should take note of.