Dell To Explore Potential Spin-off Of Stake In VMware

(RTTNews) - Shares of Dell Technologies Inc. (DELL) gained over 8% in extended trading session on Wednesday after the computer maker said it is exploring a potential spin-off of its 81% stake in VMware (VMW).

Although this exploration is in an early stage, Dell said it believes a spin-off could benefit both Dell Technologies and VMware shareholders, team members, customers and partners by simplifying capital structures and creating additional long-term enterprise value.

Any potential spin-off would not occur prior to September 2021 and would be intended to qualify as tax-free for U.S. federal income tax purposes.

"The strategic relationship between Dell Technologies and VMware has never been stronger," said CEO Michael Dell. "For more than 20 years, we've innovated for our customers and created substantial growth and value for both companies and our teams. Regardless of the options we are exploring to create additional value, we are accelerating our strategy - which remains unchanged. We are focused on winning in the consolidating markets where we operate and innovating across the Dell Technologies portfolio to create integrated solutions that turn data into insights and action."

DELL closed Wednesday's trading at $52.68, up $0.18 or 0.34%, on the Nasdaq. The stock further gained $4.37 or 8.30% in the after-hours trading.