The press isn’t generally allowed into the cushy briefing rooms where Wall Street analysts get updated by corporate executives on a company’s future. At least not at tech conferences. VMworld, being held in San Francisco this week, was no different.

But analysts do provide notes for their clients. After all, it’s their job to issue guidance on investments. And while VMware CEO Pat Gelsinger reportedly had an impressive dog and pony show (a.k.a. End User Computing and Containerization innovations) on the agenda at VMworld, there was something burning in analysts’ minds: Was VMware going to, via a reverse acquisition (or a merger) of sorts, buy its parent EMC?

The Verdict

Last week Rajesh Ghai, a senior technology analyst at Macquarie Group, told CMSWire that such a move by VMware could prove to be “catastrophic” for VMware investors.

FBR analyst Daniel Ives, who attended the VMworld briefing, noted that this was the “big news” he was looking for. Afterwards he seemed relieved that Gelsinger dismissed a downstream merger with EMC.

The rumored merger/reverse acquisition might have worked as a defensive measure against activist investor Elliott Management, which wants EMC to divest itself of VMware. Its thinking is that EMC’s lackluster performance is stunting VMware’s growth.

Jayson Noland, senior research analyst at Baird, pointed out that Gelsinger "essentially took a downstream merger with EMC off the table" during the analyst briefing and added that a downstream merger is "not being given serious consideration." Noland noted that this commentary should be viewed as a "relief" for VMware's stock.

And while it’s nice to put ongoing issues to bed, Ives doesn’t seem sure that this is the last we’ll hear of it. Instead he seems to be waiting for Elliott and EMC to make their next move in what he called a “continuing strategic soap opera."

It Ain't Over Till ...

So to use Ives’ metaphor, VMworld is but an episode of the EMC, VMware show. Elliott Management hasn’t shown up so far this week, so everything appears to be rosy. 

Still it’s hard to believe that EMC Federation Chairman and CEO Joe Tucci isn’t sweating just a little. The execs at Elliott could be somewhere out on the beach in the Hamptons, watching their kids stomp on one another’s sand castles. And though Tucci could also be out by the water at his house on the Jersey Shore, he could also be huddled inside, watching the VMworld stream and counting how many times each speaker says “Federation,” not so subliminally suggesting that EMC and VMware are better together than VMware would be on its own.