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VMware Shares Drop Amid Reports on Reverse Merger With Dell Technologies

Photograph by Kris Tripplaar—Sipa USA

VMware shares are tanking amid a report that the data center software company is considering buying Dell Technologies.

VMware shares fell nearly 13% to $130.87 in mid-day trading on Monday after CNBC published a story on a possible reverse merger between Dell and VMware. The CNBC report, based on unnamed sources, said that Dell was considering selling itself to VMware as a way to go public without going through the typical formalities.

It was just last Friday when VMware shares soared after several reports emerged that Dell was considering an initial public offering after nearly five years as a private company. Dell owns a majority stake in VMware, which it inherited after buying the data center tech conglomerate EMC in 2015 for $67 billion.

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The CNBC report hedges that Dell selling itself to VMware is only one of many different choices Dell is contemplating, including an IPO, buying the remaining VMware shares it doesn’t own, or buying other unnamed companies.

If Dell were to sell itself to VMware vmw , Dell CEO Michael Dell and private equity firm Silver Lake would receive VMware shares that they could then sell to the public market, the CNBC report said.

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Dell, with Silver Lake’s help, went private in 2013 as a way to turn around the company without having to deal with public market investors. Dell, like other older tech companies including Hewlett Packard Enterprise hpe , Cisco csco , and IBM ibm , has experienced shrinking sales amid a changing technology landscape in which customers are buying fewer personal computers, printers, and traditional data center gear like servers and storage hardware.

By buying EMC to increase its portfolio of data-center-centric business units, Dell accumulated a whopping $46 billion in debt, which is one reason analysts speculate the company is considering a big corporate deal to help pay it off.

Both Dell and VMware declined to comment on the reports.

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