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Monday, July 21, 2014

Activist investor pushes EMC to spin off VMware unit - WSJ, (NYSE: VMW)

Activist investor Elliott Management Corp has taken a $1 billion stake in data storage equipment maker EMC Corp and plans to push the company to spin off its VMware Inc unit, the Wall Street Journal reported, citing people familiar with the matter. Elliott will seek to convince EMC that the company's lagging stock would receive a substantial boost if it were to spin off VMware Inc, in which EMC owns a majority stake, the daily said. ( of Elliot Management and EMC were not immediately reachable for comment outside regular U.S. business hours.EMC posted a better-than-expected revenue in the last reported quarter but VMware reported weak growth in bookings.Elliott, which will become the fifth largest shareholder in EMC after picking up the stake, is expected to argue that the company's present structure has hampered the performance of EMC's stock, the Journal said.

VMware, Inc., is the provider of virtualization infrastructure solutions utilized by organizations to help transform the way they build, deliver and consume information technology (IT) resources. Shares of VMW traded higher by 2.34% or $2.18/share to $95.31. In the past year, the shares have traded as low as $69.86 and as high as $112.89. On average, 1469770 shares of VMW exchange hands on a given day and today's volume is recorded at 1256212.