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Enterprise Software - Tuesday, August 14, 2007

VMWare IPO Crushes It

At this post, VMWare is trading at $55 per share, well above its open price at $29. When EMC bought VMware (VMW) in 2004 for $625M and there was some criticism that EMC had overpaid, reports Barrons. The company’s 85.6% stake is now worth in the vicinity of north of$16B and is closing in on half of EMC's total market cap.

Analysts are giddy over the stock. Jefferies & Co. launched coverage this morning with a Buy rating and $42 price target which the company blew past. Jefferies says the company’s virtualization software is the first new layer of IT infrastructure in more than 10 years and says the company has a 5-year lead in helping IT improve server ROI. Holding down more than 90% of the virtualization market, VMWare “is on a trajectory that mirrors Microsoft Oracle and Veritas in the early days.”