Saturday, November 14, 2009


I just put in a limit order for VMWare's stock. A limit order is where I place an order based on the price going below a benchmark I set. As of Friday VMWare was trading at ~$41.50. My limit order is set at $40. Meaning, if the price goes below $40, I'll be a partial owner.

Why am I buying VMWare? The primary reason is that not only my company, but the companies my company has been contracting with (e.g. HP), all use VMWare for their "cloud" services. This got me thinking; If cloud computing is what everyone is bragging about, and the companies my company is contracting with are using VMWare, VMWare is getting a lot of visibility with management. Whether their technology is good or not, visibility with management is great in the short-term.

Looking at VMWare's financial statements, they carry a good amount of cash, have a manageable amount of debt, and most importantly, have positive operating profit. For those of you who have suffered through business school, positive operating profit is key.

Think I'll be rich? Don't count on it. I only bought $1000. So unless they turn into Google, I don't plan on retiring soon. But, if by chance VMWare turns out to be the leader in providing "cloud" infrastructure, I stand to make a few bucks.

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