VMware Shares Plunge 33 Percent

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Shares of virtualization market leader VMware (VMW) are off $27.75 to $55.25 as of mid-afternoon, a drop of 33.5 percent. The plunge began in after-hours trading yesterday after VMware lowered its revenue guidance for 2008 and reported fourth-quarter revenue that fell $5 million shy of expectations. That disappointment, coming in the wake of the surge in valuation of VMware shares since its IPO last August, set the stage for a huge selloff.

Eric Savitz at Tech Trader Daily rounds up the reaction from Wall Street analysts that follow VMware. He leads off with John DiFucci of Bear Stearns, who cut his price target for VMware from $132 to $106 – still nearly twice the current price of the stock. For more perspective, see the transcript of yesterday’s analyst conference call by VMware executives.

About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.