Dell jumps in its return to the public market (DELL)

Michael Dell

Dell jumped as much as 3.88% to $46 Friday as it returned to the public market.
Dell reentered the public markets without going through the usual initial-public-offering process because it bought back shares tied to its interest in the software maker VMware.
The acquisition faced strong opposition from billionaire activist investor Carl Icahn, who was VMware's second-largest shareholder.
For Dell, buying back DVMT was actually something of a Plan B. Originally, the company was floating the idea of performing a "reverse merger" with VMware, that would see Dell go public by completely taking it over.

Dell jumped as much as 3.88% to $46 Friday as it returned to the public market. It is currently trading up 1.19%, giving it a market cap of almost $9 billion.

The computer maker reentered the public markets, but didn't go through the usual initial-public-offering process. That's because earlier this month it paid $23.9 billion ($120 a share) to acquire the publicly traded "tracking" shares of VMware, a listed software maker that was already about 80% owned by Dell. The shares, under the ticker "DVMT," were born as part of Dell's complicated deal to buy EMC a few years ago.

Dell's acquisition of DVMT faced strong opposition from the billionaire activist investor Carl Icahn, who owned an 8.3% stake and was VMware's second-largest shareholder. Icahn sued Dell last month because of its previous proposed $21.7 billion offer for the tracking shares. He thought the shares were worth $144 apiece — 20% more than the $120 they were acquired for earlier this month.

For Dell, buying back DVMT was actually something of a Plan B. Originally, Dell floated the idea of performing a "reverse merger" with VMware, that would see it go public by completely taking it over.

In February, Morgan Stanley analysts Keith Weiss and Sanjit Singh said such a merger would be "worst case scenario" for VMware shareholders, and Dell ultimately backed down from that plan of action — instead opting to purchase this VMware tracking stock, and go public that way.