VMW RECEIVES A BUYOUT OFFER — 175 BUYOUT OF AN ARORA PORTFOLIO COMPANY

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By Nigam Arora & Dr. Natasha Arora

Signal Limited is a Signal(s) with a great record in similar situations but does not meet all of the stringent criteria for a Signal. Typically Signal Limited has higher risk-reward compared to a Signal over the short term. 

VMware (VMW) has agreed to be acquired by Broadcom (AVGO) for about $138.23.  VMW shareholders will elect to receive either $142.50 in cash or 0.2520 shares of AVGO.  The shareholder election will be subjection to proration.  About 50% of VMW shares will be subject to cash and 50% subject to cash exchange.

Go Shop

The agreement has a go shop provision.  This leaves the potential of a higher bid by a third party.

What To Do Now

The stock is trading at $121.05 in the pre market after having traded as high as $124.  The reason is that AVGO has foreign connections.  There is concern that the transaction may not receive regulatory approval.  For this reason, the decision to hold or exit becomes a matter of personal preference.  A good way is to exit one half and hold the remaining to see if a higher offer emerges.

Trades posted on The Arora Report Market News have produced unrivalled performance since 2007.  These trades have been scrutinized in real-time by thousands of investors across the globe.  This provides easy verification of performance for newcomers to this site.  Only those trades are included in the performance where the entry post was made available to subscribers to The Arora Report Market News.  When the entry post is made available only to the paying subscribers and not posted in real-time on The Arora Report Market News, the resulting performance of the trade is not credited in the performance table.  There are very nice gains on this trade but since the entry trade was not posted here for the free subscribers in real-time but only made available to the paying subscribers, handsome profits on this trade will not be added to the performance of The Arora Report Market News shown on the table.

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This post was just published on ZYX Buy Change Alert.

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Nigam Arora

Nigam Arora

Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.

Dr. Natasha Arora

Dr. Natasha Arora

Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.

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