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Dell votes to buy back VMware tracking stock and will likely go public

Dell just announced that it has agreed to buy back the VMware tracking stock from the EMC acquisition. The company confirmed the buy-back price of $23.9 billion. With today’s move, the company will likely go public.
Sixty-one percent of shareholders voted in favor of the deal. It’s unclear how Wall Street will deal with the $50 billion debt load the company is carrying as a result of that $67 billion EMC acquisition from two years ago if the company does go public.
“With this vote, we are simplifying Dell Technologies’ capital structure and aligning the interests of our investors,” company chairman and CEO said in a statement.
Part of the EMC deal was a payout to shareholders based on VMware tracking stock. VMware was a key part of the deal in that it was one of the more valuable pieces in the EMC federation of companies. It still runs as a separate company with separate stock listing.
There was much drama prior to this vote with activist investor Carl Icahn suing the company last month after Dell had announced a price of $21.7 billion for the tracking stock last July. The move did get Dell to move the needle on the price a bit, although not as much as Icahn had hoped.
With today’s vote, Ray Wang, founder and principal analyst at Constellation Research says that the company is looking to move away from activist investors like Icahn and Elliott Management to more traditional institutional investors. “Dell is attempting to rid his short term activist shareholders for more mid- to long-term institutional types as he goes public again,” Wang explained.
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