> It's trading at a 35% discount from VMW, which is pretty steep.
Sure is, but keep a few things in mind..
1) This is the first time tracking stock has been issued on a public company so there are alot of people out there who aren't really sure what to make of this class instrument yet.
2) You'd expect a steep discount due to liquidity and lack of typical share holder rights. For example, if VMWare did pay a dividend, then the tracking stock would not necessarily have to pay that out to unit holders.
3) EMC paid a dividend. There are alot of funds that bought EMC to get the dividend. They've been forced to sell the tracking stock as VMWare doesn't pay a dividend and the tracking stock won't pay one.
Sure is, but keep a few things in mind..
1) This is the first time tracking stock has been issued on a public company so there are alot of people out there who aren't really sure what to make of this class instrument yet.
2) You'd expect a steep discount due to liquidity and lack of typical share holder rights. For example, if VMWare did pay a dividend, then the tracking stock would not necessarily have to pay that out to unit holders.
3) EMC paid a dividend. There are alot of funds that bought EMC to get the dividend. They've been forced to sell the tracking stock as VMWare doesn't pay a dividend and the tracking stock won't pay one.