This summer VMWare pulled off one of the hottest IPO’s (initial public offering) of the year. The parent company EMC went public with VMWare and 10% of the stock is now publicly traded. The stock jumped instantly from the official $29 price to the mid $50’s. Whoever got in early made a good chunk of money. For the next few weeks the stock went up and down between low $70s and mid $50’s and day traders were able to make some good money.
On September 11, 2007 VMWare opened its annual user conference and released quite a few news stories as well. The additional publicity pushed the stock $80+. Great performance and good for anyone who got in early enough (even at $70 you were able to pull of a 10% ROI almost instantly). But where will the stock price go from here? The P/E ratio with over 243 is way above normal and VMWare will have to beat some high expectations to justify a stock price that high.
From a web hosting point of view the IPO can be beneficial as it will help to drive VMWare ESX into the hosting industry. More implementations of the software will mean more user-based support and eventually some Open Source scripts and tools. VMware released its VMWare tools already as open source this week and I am sure we will see a lot of good stuff heading our way. Exciting times for those web hosts that are able to position their business in the right place.