If : VMware net income for the twelve months ending October 31, 2022 was $1.406B.
(not revenue, income/profit we're talking). And BC is going to pay ~ 69B$. 1/2 stock 1/2 cash (they they presumably) have to take a loan for (at today's interests rates, not last years). of ~32B$. VMware claims 31B in assets (which includes 12B$ of goodwill no less), with 29B in liabilities on their latest financial reports - so that's effectively a wash. The ROI on ~32B$ loan at even 2B$ a year in profits/payback will take over 10 years. I'm not feeling it.
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You will have better luck (and fun) asking a magic 8 ball
Any idea when is the AXE falling?
April, May or later of 2023 ?
VM is the most inefficient company I have ever worked for. So many overlapping roles, do many layers of management. Managers with no direct reports. BC sees these inefficiencies as a great opportunity.
Better slides because VMware is an inefficient and incompetent company.
Get ready for the architect from the Matrix , aka Hock , to come in and make everyone’s head explode.
“Rest assured, this will be the sixth time we have destroyed it, and we have become exceedingly efficient at it.”
This is a walk in the park for Broadcom. Slash, burn, rinse, lather, repeat…
Not sure if I am the only one but I find BC presentation slides a lot more professionally done compared to VMW. We are talking about a company with a much leaner marketing team huh….
The bottom line will be cut dramatically and it should. Over the top progressiveness in the form of DEI will be toned down. Ex If you stay with the newly “merged” company, don’t expect to file protests in chat during an all-hands. You will be fired. In some respects, AVGO will be a breath of fresh air, for the few
See slide 15 here: https://investors.broadcom.com/static-files/a64632bd-2cd2-4fbc-a0a1-364acd16ff6c
You can see the 2 tiering of clients, their sales strategies, etc - everything Raghu and Sumit have been babbling about these past days. The "VMware" strategy is no longer anything but a talking head for Broadcom.
It is the Broadcom playbook. Cut opex from Sales, G&A and R&D by a factor of 2x to 3x and then sell off underperforming assets for cash to deleverage. That's $4B+ back in the pockets within a year and then raise prices / lower discounts and the additional revenue is pure profit so another $1.5-$2B and that is how you get to the $8.5B EDITDA.
It is really a pretty simple thing to execute.
Minor detail: BC might have locked in a lower interest rate last year at time of deal.
In any event, massive cuts to the bottom line will be needed for the deal to work.
They laid some folks off back in Jan
I am sure there will be more Layoffs post acquisition. But VMware as already lost more then 2% of the workforce YoY, because of people leaving.
It honestly doesn't, they're just cash rich and wanted to get deeper into software.
He-l, they tried buying SAS... an analytics company (rumored for $15-20b). Then made a pivot and went to us, a completely unrelated company.
Offcourse everyone knows layoffs will be after acq. But its not getting completed. Everyone has been waiting for 1 year now
It seems like layoffs will be post acquisition.
Any news when layoffs are coming ?
All big tech already on their 2nd round now. And vmw not started even 1st yet. Looser Hock.
The net profit will be much higher than 1.4B for the year if Broadcom performs mass layoff and raise prices...