VMware (VMW) IPO Countdown Begins

The hottest software IPO of 2007 is likely just two weeks away.

VMware (VMW) has begun its official IPO roadshow, and has set tentative pricing of it’s IPO at $23 to $25 per share.  EMC will be retaining an 87% stake in the company.  The shares released to the public will be Class A shares, while EMC will retain Class B shares that have a 10:1 voting ratio to Class A shares.

That structure tells me that EMC wants to maintain control of VMware, while reserving the ability to liquidate a majority of the shares.  With that voting ratio, EMC could liquidate its stake down to just 9.1% of the company, while still maintaining control.  More details are available from 24/7 Wall Street:

The final pre-IPO range is for 33 million shares of class A common stock at an expected price range of $23.00 to $25.00.   That price can change ahead of the IPO and is not set in stone.  Book runners are Citigroup, J.P.Morgan, and Lehman; co-managers are listed as Credit Suisse, Merrill Lynch, and Deutsche Bank.  After the offering EMC will own 26.5 million shares of Class A common stock but will own all 300 million shares of the Class B common stock, representing approximately 87% of the outstanding shares.  The rights of A & B shares are identical, except when it comes to who gets the final say: Class B shares have 10 votes, or then-times the 1 vote per share of class A common stock.

As a sign of the times, you can actually watch the entire IPO roadshow here, on the web.  The stock will begin trading as VMW, and will likely issue the week of August 13th.

There has been plenty of blog coverage of the IPO.  Here is a Google Blog Search link to the most recent articles.

EMC has already run up by over $10 Billion in market capitalization since the IPO was announced.  Not surprisingly, that is roughly in the range of the expected value of VMware.  With $289 Million in revenue in Q2 2007, VMware is on fire, growing at near triple-digit rates year-over-year.

Even if you have no interest in investing, it’s likely worth watching the roadshow if you are interested in the virtualization space.  VMware is a smart aggressive company, and they keep moving the bar higher.

Hard to believe that EMC acquired them for just $623 Million in 2004.  Now that was a good buy.

DirecTV Tivo Declares “I’m Not Dead”… Yet

Saw this article yesterday announcing new features for DirecTivo boxes still in service (like mine).  For some reason, it reminded me of this Monty Python sketch where the guy tells the dead collector that he’s “not dead yet”.

Engadget: DirecTivo Owners to Get Update in Early ’08

The article details new features that DirecTV customers using Tivo can expect in early 2008:

  • Online scheduling (finally)
  • Deleted items folder
  • Overlap protection

Yes, all these features have been available for years on other Tivo boxes.  Yes, DirecTV is still not providing access to home media options, Tivo To Go, Amazon Unbox, or any of the other cool services from Tivo.  Yes, DirecTV apparently has no interest in actually pleasing its customers.

I’ve written before about the mistake DirecTV made to abandon Tivo effectively for the inferior NDS-based solution.   They took a fairly proprietary advantage that led to incredibly low customer churn rates, and turned it into a powerful driver to force some of their most valuable customers to move to their cable competitors.

In any case, with the announcement of the new, $299 Tivo HD, I can’t imagine why anyone who moves to HD would stick with DirecTV… except maybe if you have to have the sports package.  I have friends who are still working off the old HD DirecTivo.  Maybe they can ride that out until DirecTV gets serious again about Tivo support.