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VMWare Plummets 17%: Goldman Removes It From "Conviction Buy" List, Keeps It Just A "Buy"

Tyler Durden's picture


Yesterday $42 billion tech behemoth VMWare stunned its investors when not only did it cut guidance, announcing that global demand is sliding, scaling back products but also disclosing a 7% workforce cut: hardly the stuff that global recoveries are made of. Sure enough, the stock is getting clobbered -17% lower this morning with the weakness likely to spread to the rest of the tech space. But just in case there was any confusion who was making money into last night's epic collapse, and was selling the stock to muppets who were told it was not only a Buy, but a "Conviction Buy", and to buy with both hands no questions asked, look no further than the usual suspect.

And yes, following today's nearly $7 billion market cap wipeout, the stock is somehow still a Buy.

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Tue, 01/29/2013 - 08:57 | 3194371 GetZeeGold
GetZeeGold's picture



Well of course it's a buy....it's down 17%.


Flip the crap....what could go wrong?

Tue, 01/29/2013 - 10:01 | 3194537 homersimpson
homersimpson's picture

I hope someone from VMWare is reading this..

VMWare folks - if you want to keep your stock price up, KEEP YOUR FRICKIN' CUSTOMERS.


I dunno what got into you crackheads, but if you think you're just going to force us to pay millions for something that was in the lower six figures not too long ago, you all can kiss my ARSE. BOTH CHEEKS.

Hyper-V does the same job as VMWare does you greedy dumbasses (for a lot less cash)!

I'm sure a lot of other folks feel the same way - hence your stock price down 17%.


-A former VMWare customer as of this year who basically burned your licensing proposal as firewood


Tue, 01/29/2013 - 10:28 | 3194624 CrazyCooter
CrazyCooter's picture

I use the shit out of Hyper-V at work.

Lesson about IT products folks, including operating systems, smart phones, and virtualizing hardware.

  1. If you are first to market, you get a huge head start in market share, profits, and attention.
  2. After the race is on, its a fscking commodity unless your innovation is adding 10% to 20% minimum value over each and every product cycle ... forever



Tue, 01/29/2013 - 21:23 | 3197216 mjcOH1
mjcOH1's picture

"Well of course it's a buy....it's down 17%.

Flip the crap....what could go wrong?"

Well shit.....there's still retail demand. You can't downgrade it to 'hold' until it's bottomed. 'No Muppet Left Behind' and all......

Tue, 01/29/2013 - 11:55 | 3194953 Panafrican Funk...
Panafrican Funktron Robot's picture

VMWare always sounded like "vaporware" to me, so I never seriously investigated investing in it.  

Tue, 01/29/2013 - 13:14 | 3195225 GeezerGeek
GeezerGeek's picture

VMWare was not vaporware last time I turned on my VMWare system. I'm talking about a server I built myself, at home, and started with ESXi version 3.5. For free. Upgraded later - for free, again - and have all sorts of virtualized machines going. Old DOS VMs, Windows 3.1 VMs, several older laptops with various flavors of Windows, some Linux stuff...Okay, I'm a tech geek. Made my living for 30+ years that way. But it's a great way to get nostalgic about some of those old games and applications that simply don't run on new operating systems.

And speaking of Hyper-V, I've used that, too. Indeed, I just installed the Client Hyper-V feature on my Windows 8 machine. Great thing, once I got it working. Buried in one of the official Microsoft documents is a comment that, when installed on some laptops, it may be necessary for the user to REMOVE the battery as part of the update cycle. Seriously?

VMWare for the hobbyist - to which I've been reduced this last year - is every bit as good as Hyper-V. In the enterprise they did jack the price up way too high for all the value-added features and support plans. They forgot that Microsoft can undercut anyone on pricing in a specific area because Microsoft has multiple streams of income, not just their hypervisor.

Tue, 01/29/2013 - 11:58 | 3194963 slackrabbit
slackrabbit's picture


However MS does the same by screwing you with the cost of System Centre and MOM Server.

We are trying Xen and Qemu because the costs for the management utiilites are rude.

Virtualisation is not longer about the V side and more about the management utility side.

Theres heaps of free open source management scripts and utlities out there now and so we will be deciding at the end of the month.

Frankly both VMware and MS have been greedy for too long, now the alternatives are looking pretty good.

If VmWare wants to get market share back - make auto-failover free.

Tue, 01/29/2013 - 14:08 | 3195415 hansg
hansg's picture

I'm not working with vmware... But answer me this: why would you keep using vmware if the license cost for a single virtual machine goes over the price of one real, physical machine?

Tue, 01/29/2013 - 15:47 | 3195892 Non Passaran
Non Passaran's picture

Less rack space, opex, etc

Tue, 01/29/2013 - 08:55 | 3194372 Uncle Zuzu
Uncle Zuzu's picture

It's now on the "Buy without conviction" list.

Tue, 01/29/2013 - 09:11 | 3194401 tallen
tallen's picture

Conviction Muppet Buy List.

Tue, 01/29/2013 - 09:41 | 3194478 francis_sawyer
francis_sawyer's picture

We definitely need a higher dosage of "convictions"

Tue, 01/29/2013 - 08:56 | 3194373 swissaustrian
swissaustrian's picture

Dear Tylers: Please publish Goldman's whole conviction buy list with earnings dates!

Tue, 01/29/2013 - 09:19 | 3194426 silver500
silver500's picture

I am not sure if they publish this.

Tue, 01/29/2013 - 08:56 | 3194374 ziggy59
ziggy59's picture

I saw no conviction list of the perps

Tue, 01/29/2013 - 08:58 | 3194377 ReptilianSlaveMaster
ReptilianSlaveMaster's picture

Dont be a moron and just buy the fing dip, what part of it's illegal for bulls to lose money don't you get

Tue, 01/29/2013 - 08:59 | 3194378 fonzannoon
fonzannoon's picture

Has GS removed Patriot coal from it's conviction buy list yet?

Tue, 01/29/2013 - 09:14 | 3194390 Sudden Debt
Sudden Debt's picture

only if they went into chapter 11 which is a hold.... everything else is A BUY!!!

besides PM's of course... strong sell... the economy is just doing to well...

Tue, 01/29/2013 - 09:17 | 3194419 Bogdog
Bogdog's picture

wow. talk about wealth evaporation..........

Tue, 01/29/2013 - 09:05 | 3194383 Sudden Debt
Sudden Debt's picture

In China the government would have prevented the stock to drop....

so... why does the communist government of America let this happen?!






** if you make more than 5 million a year, you are "the people". For everybody else.... it sucks to be you...

Tue, 01/29/2013 - 13:16 | 3195239 GeezerGeek
GeezerGeek's picture

You ask "why does the communist government of America let this happen?!"

Perhaps they forgot to contribute to Zero's reelection campaign.

Tue, 01/29/2013 - 09:04 | 3194387 Headbanger
Headbanger's picture

It's all my fault for using Parallels instead

Tue, 01/29/2013 - 09:08 | 3194397 Sudden Debt
Sudden Debt's picture

At least Enron isn't on the conviction list anymore....

Tue, 01/29/2013 - 09:31 | 3194433 GetZeeGold
GetZeeGold's picture



This is your CEO on crack.


Tue, 01/29/2013 - 09:11 | 3194407 mac_daddy
mac_daddy's picture

Microsoft entered this segment of IT a few years ago with their Hyper-V product, which is free. I'm sure that has cut into their market share as well.

Tue, 01/29/2013 - 09:56 | 3194528 No One
No One's picture

Not only is it free, Hyper-V is starting to match the performace of ESX. While not there yet, it is close enough where some of my customers have finally gone "I need to consider Hyper-V as a platform going forward". Translation - The additional costs of ESX are becoming harder and harder to jusitfy, as there just isn't that performance and management gap as before.

With the enhancements made to System Center 2012 and Hyper-V, what can VMware do to not become Netscape, OS/2, etc. (what ever techology that MS decides to take on)?  

Tue, 01/29/2013 - 10:37 | 3194656 CrazyCooter
CrazyCooter's picture

It isn't that MS decided to take them on, it is simply that the product is a commodity (see comment up thread). If VM Ware was adding value, cycle after cycle, it would be very difficult to catch up to them as a competitor. But, when tech companies are first to market and then promptly proceed to add little to no innovation (i.e. signigicant value gains), it is quite straight forward to introduce a competing product ... the target isn't moving!

MS saw this opportunity to sink some development dollars and steal a lot of customers. MS is getting paid when they sell lots of server licenses as people decided to spend the money on the OS with free virtualization and not VMWare.

Besides, the probably had to do it anyway "for the cloud" which is a broke dick business model. No way, no how I am going to the cloud. My hardware, my data, my IP, my server room. Period.



Tue, 01/29/2013 - 13:20 | 3195252 GeezerGeek
GeezerGeek's picture

For not readily sharing your deepest secret information with the NSA you are hereby declared a terrorist. Please turn yourself in.

Tue, 01/29/2013 - 11:00 | 3194734 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

You can do an awful lot of VMWare's things in opensource for free in many common Linux distros, you just have to hire decent Linux folks rather than just try to make it with overpaying for proprietary junk and entry-level button clicker MCSEs..

Tue, 01/29/2013 - 09:14 | 3194410 Bogdog
Bogdog's picture

Consulting my Muppet Enabler Portal (Scottrade account) I see where Market Edge rates it as a Buy, S&P rates it 4-star Buy, so all is well, carry on. Color me not suprised.

Tue, 01/29/2013 - 09:42 | 3194414 Sudden Debt
Sudden Debt's picture

I always get these advertisings on the left of "WOMAN IN YOUR NEIGHBOURHOOD"...

strangly... I get the same pictures if I log in 80 miles away from home....




Tue, 01/29/2013 - 09:16 | 3194416 zilverreiger
zilverreiger's picture

qemu kvm bitchez!

Tue, 01/29/2013 - 14:07 | 3195412 blu
blu's picture

VMware might have serious competition from KVM when a robust virtual security and network management appliance for KVM shows up.

In fact, that will be sometime later this year.

Then we'll see.

Tue, 01/29/2013 - 09:20 | 3194429 firstdivision
firstdivision's picture

It's still a "buy", because GSProp is trying to sell more calls, and short more shares.

Tue, 01/29/2013 - 09:40 | 3194475 Zgangsta
Zgangsta's picture

Buy is the new Sell.

Tue, 01/29/2013 - 09:32 | 3194455 q99x2
q99x2's picture

The Convict Goldman list is never a buy.

Tue, 01/29/2013 - 09:37 | 3194469 Meatballs
Meatballs's picture

Conviction. If only.

Tue, 01/29/2013 - 10:12 | 3194568 Chippewa Partners
Chippewa Partners's picture

Surely they were doing WHALE TRADES  with muppets yesterday............ 

Tue, 01/29/2013 - 10:39 | 3194661 Colonel Klink
Colonel Klink's picture

Muppets meet dicks!  Rinse....repeat.....


They'll just never learn to stop dealing with dirty Goldmans.  Sleep with a whore, wake up with a disease and all your money missing.

Tue, 01/29/2013 - 13:38 | 3195314 StoleYourMoney
StoleYourMoney's picture

Goldman Sachs; betting against its clients since 2006.

Tue, 01/29/2013 - 15:28 | 3195806 mkhs
mkhs's picture

You might want to check that date.  GS has been around a bit longer.

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