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VMware IPO Nearly Doubles the Goal

VMware's much-anticipated IPO prompted a frenzy of first-day trading in the virtualization vendor's shares and speculation about parent company EMC's next move. (See VMware Prices IPO and VMware IPO in the Offing.)

The vendor's shares opened at $52 this morning, well above VMware's $29 target price. (See Double-Take, VMware Adjust Plans.) The shares closed slightly lower, at $51, although the IPO was still worth just under $1.7 billion, almost double the vendor's $957 million goal.

The offering even prompted wistful comparisons with the heady days of the dotcom explosion. "I havent seen this level of demand in a tech IPO since 1999 to 2000," says Scott Sweet, senior managing partner of financial analyst firm IPOBoutique.

The analyst even made a comparison with Google's 2004 IPO, which was the largest technology offering of recent years. (See Tech Cash Slashed? Learn From Google, Google IPO in Doubt, Gettin’ Googly, and Tracking Google's IT Booty.) "Google had trouble doing their deal initially, they had to lower their price [whereas] VMware raised theirs."

In addition to VMware, EMC looks set to be one of the big winners in today's IPO. (See EMC Still Rules VMware.) The storage vendor bought VMware for $635 million back in December 2003 and announced plans to spinoff part of its acquisition via IPO earlier this year. (See EMC Offers 10% of VMware, EMC Still Rules VMware, VMware, EMC Extend Offer, VMware to Spin Out, and Storage Bubble Wrap.)

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