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EMC Corp. (NYSE:EMC) and VMware Inc. (NYSE:VMW) announced early this morning that the exchange offer for certain employee stock options is being extended to 11 AM EST on August 13, 2007.  The prior date had been August 9 at 11 AM EST.  This is extension is to allow employees to switch options from EMC to VMware. 

As of last night, a total of 10,277,000 shares of EMC and 3,197,000 shares of EMC restricted stock were validly tendered and not withdrawn.  That represents 83.6% of the outstanding shares of EMC stock options eligible and 55% of the outstanding restricted EMC shares eligible to be tendered.

What are the other employees thinking?  EMC has made a huge run, and VMware is one of the hottest and most anticipated tech IPO’s in quite some time.  You have to wonder if the employees that haven’t tendered are just unavailable or just haven’t gotten around to tendering shares, or if they are the hold-outs wondering if this is a good deal or not. 

We are waiting to hear back if this will have any meaningful delay on the IPO date for VMware.  Normally the possibility of a few days delay wouldn’t matter. But this one has been quite anticipated and any employee concerns might add detract from some of the buzz.  The other issue is that options speculators are playing EMC via August stock options, and options expiration is Frdiay, August 17. The AUG $19 CALLS have 67,876 contracts in the open interest and the AUG $20 CALLS have 80,340 contracts listed as the open interest.  That represents almost 15 million shares on a fully leveraged basis on those two strike prices alone.

Jon C. Ogg
August 7, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.