- Dell is considering options including selling off its $50 billion stake in VMware, The Wall Street Journal reported Tuesday, citing sources familiar with the matter.
- Shares of Dell surged more than 15% in premarket trading Wednesday.
- VMware shares also jumped more than 10% in premarket trading Wednesday.
- Watch Dell and VMware trade live on Markets Insider.
- Read more on Business Insider.
Dell is considering options including selling off its roughly $50 billion stake in VMware or buying the rest of the cloud company in an effort to boost the value of its shares, The Wall Street Journal reported Tuesday, citing sources familiar with the matter.
Shares of Dell surged more than 15% in premarket trading Wednesday.
In the review, Dell’s goal is to address the gap between its market value and the size of its 81% stake in VMware, according to the report. At Tuesday’s close, Dell’s market value was roughly $36 billion, about $14 billion less than its VMware stake.
That signals that the market is assigning Dell’s core business very little value, something a separation might improve, WSJ reported. A transaction involving VMware could further be designed to help reduce Dell’s $48 billion debt load, according to the report.
Shares of VMware also jumped more than 10% in premarket trading Wednesday to about $164 per share.
The review is at an early stage and Dell might not decide to do anything, said WSJ, and any deal is unlikely to come this year due to tax reasons.
Shares of Dell are up about 9% year-to-date.
