• Dell jumped as much as 3.88% to $US46 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.

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Dell jumped as much as 3.88% to $US46 Friday as it returned to the public market. It is currently trading up 1.19%, giving it a market cap of almost $US9 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 $US23.9 billion ($US120 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 $US21.7 billion offer for the tracking shares. He thought the shares were worth $US144 apiece – 20% more than the $US120 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.

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