One of the largest mergers in the tech industry has taken another step further. The $69 Billion worth deal between semiconductor manufacturer Broadcom Inc. (NASDAQ: AVGO) and cloud computing company VMware Inc. (NYSE: VMW) got conditional approval from the European executive body. Following the news, VMW stock price rose up to 10% while AVGO rose 4% to date.
The American chipmaker company has been “highly acquisitive” since it went public in 2009. Earlier it bought CA Technologies for $18.9 Billion and the enterprise security business of Symantec for $10.7 Billion, according to Financial Times, a leading financial daily.
The VMware acquisition came in the wake of Broadcom’s intentions to diversify its operations to cloud computing operations along with regular chip manufacturing. The $69 Billion deal for acquiring VMare consists of $61 Billion in cash and stock while the rest is $8 Billion in debt.
The regulatory concerns with the Broadcom and VMware deal were somewhat similar to Microsoft and Activision Blizzard deal: a threat to rivals’ competition and price rise. Along with the European Commission, the merger got legal clearance in Australia, Brazil, Canada, South Africa, and Taiwan. The deal is still in a regulatory deadlock in the United States, United Kingdom, and China.
VMware Stock Price Movement
For more than a year, VMware stock price was broadly in a consolidating phase without any significant downward or upward moves. The recent push, in addition to the previous highs in recent past months made VMW stock attain a 52-week high at $158 recently.
Currently, VMware stock is trading at $156 following the slight decline of 0.60% in the last intraday session. VMW price is up by over 25% since the start of this year while increasing more than 40% year after year.
VMW stock saw a gap in November 2021 dropping from $151 to around $126. Since then, it has tried to fill the gap but succeeded only recently. Given the past price movements, $136 is acting as a strong support for VMware stock price, while the immediate support stays at $140. If the price goes beyond the price level, $120 is likely to be the next stop.
The price started gaining momentum since the last earnings release in June 2023 despite a negative surprise in revenue and EPS. The current price movement is likely to push prices over $168 and $171.
However, since VMware’s stock price was overstretched and moved far above its 50-day EMA, a short-term retracement might be waiting down the road. If the price continues its rally to $168, it would have gained up to 30% since June 1, 2023. If the strong support would help, VMW could further rally to $183.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/07/15/vmware-stock-vmw-rose-10-since-eu-approved-broadcom-purchase/