Cloud software stock Broadcom (NASDAQ:AVGO) has been in pursuit of VMware (NYSE:VMW) for quite some time now. For a while, it looked like the end of the road was near, as the various competition authorities went over this deal with a fine-toothed comb, as they have with so many others of late. But just when things were looking brightest, the Chinese regulators stepped in and all but ruined the deal. VMware plunged over 7% in Tuesday morning’s trading as a result.
The news from the Chinese regulators proved anything but welcome to Broadcom and anyone hoping that VMware would end up being purchased for the over-$60 billion price tag that Broadcom planned to put up for it. The latest word says that, now, approval of the deal from Chinese regulators will now depend largely on macroeconomic conditions, which Broadcom has little control over. Worse, Broadcom’s planned remedies for various Chinese concerns don’t appear to be an issue at all, but the regulators are simply holding up the deal due to outside conditions. Meanwhile, the deal spread nearly tripled, going from $6.09 to a whopping $17.
Is VMware Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on VMW stock based on four Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average VMW price target of $169 per share implies 1.2% upside potential.
