Elliott Management Corp. has taken a stake of more than $1 billion in EMC Corp. and plans to push the data-storage giant to break itself apart, The Wall Street Journal reported today. The investment, which hasn't been previously disclosed, amounts to about 2 percent of the Hopkinton, Mass., company's $55 billion equity value and would make the hedge fund its fifth-largest shareholder. It is one of the largest positions that the company has ever taken. Elliott will seek to convince EMC that the company's lagging stock would receive a substantial boost if it were to spin off VMware Inc. EMC owns a roughly 80 percent stake in VMware, and Elliott is expected to argue that the company's present structure has hampered the performance of EMC's stock. Should EMC move to split off VMware, potential buyers of part or all of the company could emerge. If Elliott is successful, a breakup or sale could cause ripples through the roughly $2 trillion annual market for hardware, software and technology services sold to companies. Elliott's investment in EMC also spotlights how size is increasingly not a barrier for activist investors, who have lately set their sights on some of the world's largest companies.
