Picked up some after the drop Jan 9, but it continues to dribble down and I cannot find a reason, in all my research, seem to be well liked and written about everywhere I look, seekingAlpha, Fidelity's long list of reports, etc. I just can't find the reason for the coninuted weakness, what new news since Jan 9, any ideas?
Most likely it is primarily due to Vmware (EMC owns 80%, maybe more now, of VMW). Vmware has had very high growth for many years but it is slowing down now for a number of reasons.
First, Vmware is up against harder competition now than in the past. Microsoft beefed up Hyper-V a lot and includes it for free with Windows Server 2012. In addition the open source hypervisor KVM is getting better and it is included by default in linux (i.e. a very good free os with a free hypervisor).
Finally the virtualisation market is pretty saturated already. We will probably see more and more enterprises putting servers into a "public cloud" (Amazon Web Services, Microsoft Azure, HP Cloud Services, etc). This is going to cut down on the need for physical on-site storage (EMC's main business) and also on-site virtualization (Vmware's main business).
EMC needs to find a new avenue for growth which is what the pivotal spin out is for. EMC is spinning out a couple of products into a new company called Pivotal, in the same manner as how they let Vmware operate as an independent company. They are going to try and find growth in platform-as-a-service and in "big data" analytics. Of course, many other IT giants are doing the same thing.
The IT industry as a whole is getting squeezed. So everyone has been getting into each other's business for the last few years. I think there will be more consolidation in the industry.
I personally would not bet on EMC because their huge breakout success (Vmware) is being disrupted and I don't see Pivotal being near as big of a success as Vmware was.
I'm long HPQ, CSCO, and IBM in the tech sector.
