Shares in Broadcom and software maker VMware fell Tuesday on speculation that China's regulators could derail their merger. The retreat of VMware stock came amid the Biden administration's announcement of tougher restrictions on technology exports to China.
On the stock market today, AVGO stock fell 2% to close at 884.40. VMware stock tumbled 7.7% to 165.10.
The Biden administration unveiled tougher export restrictions on computer chips that process artificial intelligence software. Nvidia stock tumbled Tuesday.
VMware Stock: China Is Last Hurdle To Closing The Deal
The White House move apparently triggered speculation that China may hit back by derailing the blockbuster merger between Broadcom and VMware. China has not announced anything on the deal.
Chinese approval of chipmaker Broadcom's $61 billion acquisition of VMware is the last hurdle to closing the deal. U.K. antitrust regulators cleared the deal in August. Broadcom has told analysts it expected to close the merger by Oct. 30.
Palo Alto, Calif.-based VMware provides cloud computing management and networking software.
If the cash and stock deal is completed, current Broadcom shareholders will own 88% of the combined company. Owners of VMware stock would get the remaining 12%.
Meanwhile, semiconductor products account for most of Broadcom's revenue. However, the chipmaker has been expanding into cloud and networking infrastructure software.
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