Report of Spinoff made Dell, VMware Shares Surge

A report revealed that after the announcement on the plan to spinoff Dell (DELL) and VMware, the company's stock skyrocketed. Wall Street Journal reported that the company has hired advisors to consider options for the company’s 81% stake in the enterprise-software company, VMware (VMW).

Dell owns a majority stake in VMware worth about $50 billion. However, after the spinoff report, both companies' stock experienced a great surge. Dell acquires a large share of the VMware company's stock following the 2016 acquisition of the storage hardware firm EMC.

According to WSJ, Dell  (DELL) - Get Report shares were up 18% in after-hours trading after closing at $49.01 per share on Tuesday, and VMware's  (VMW) - Get Report stock rose 8.4% after hours after ending Tuesday's session at $149.23.

In the recent earning report submitted by Dell on May 1, the company reported revenue of $21.9 billion, while the VMware revenue $2.8 billion, representing growth of 12% year-over-year. The result, according to Dell, "was driven by broad-based strength across a diverse product portfolio."

With a total market capitalization of  $62 billion, VMware is considered an industry leader for virtual machines for data-center servers, computer desktops, and other related technologies.

Earlier this year, Dell announced its decision to sell its RSA to cybersecurity units for $2.08 billion to a group that includes private-equity firm Symphony Technology Group, Ontario Teachers' Pension Plan Board, and the PE firm Carlyle Group's AlpInvest Partners.