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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GetZeeGold's picture



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


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

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


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



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......

Panafrican Funktron Robot's picture

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

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.

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.

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?

Non Passaran's picture

Less rack space, opex, etc

Uncle Zuzu's picture

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

tallen's picture

Conviction Muppet Buy List.

francis_sawyer's picture

We definitely need a higher dosage of "convictions"

swissaustrian's picture

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

silver500's picture

I am not sure if they publish this.

ziggy59's picture

I saw no conviction list of the perps

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

fonzannoon's picture

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

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...

Bogdog's picture

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

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...

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.

Headbanger's picture

It's all my fault for using Parallels instead

Sudden Debt's picture

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

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.

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)?  

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.



GeezerGeek's picture

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

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..

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.

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....




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.

firstdivision's picture

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

q99x2's picture

The Convict Goldman list is never a buy.

Meatballs's picture

Conviction. If only.

Chippewa Partners's picture

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

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.

StoleYourMoney's picture

Goldman Sachs; betting against its clients since 2006.

mkhs's picture

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