John Shinal

Special for USA TODAY

SAN FRANCISCO — With EMC shares spending most of Wednesday below the cash price of $24.05 that Michael Dell offered for them last fall, the stock price is raising more doubts about a deal that was already looking shaky.

The first thing to note is that the tracking-stock portion of the deal — pegged at $9.10 a share last fall by the two companies — is now valued at zero dollars a share, or essentially worthless, by money managers and brokers who buy and sell stocks for a living.

Second, while the deal’s value was touted at $33.15 a share, or $67 billion, when it was announced Oct. 12, EMC’s market cap is now $46 billion, or nearly a third less.

If EMC shares (EMC) can’t hold support at $24 between now and the company’s quarterly earnings call next Wednesday, Jan. 27, at least some market participants are starting to doubt this deal gets done even at the stated cash price.

SYMANTEC'S RED FLAG

News out this week about another leveraged-buyout deal in the technology sector has provided fresh reason to worry about this one.

Security-software maker Symantec pre-announced a disappointing quarter for its Veritas data-storage business and revised the terms of the sale of Veritas to Carlyle Group, a huge private equity firm.

Symantec will now receive $1 billion less in cash and a total of $7.4 billion, or $600 million less overall, than the $8 billion announced in August for the transaction.

One reason for the adjustment to the deal, which is expected to close this month, according to Reuters: Debt backing the deal failed to sell.

Into that same debt market, Michael Dell and Silver Lake Partners, a big private-equity firm and his partner in the EMC buyout, are trying to raise between $40 billion and $50 billion to finance it.

If the Dell-EMC transaction has any financial covenants similar to Symantec’s sale of Veritas, the amount of cash EMC shareholders will receive may depend on the success of the deal’s debt offering.

Meanwhile, shares of the crown jewel in EMC’s product portfolio – namely VMware (VMW) – continue to be pummeled by the Dell bid for its parent company.

VMware has plunged 40% in value since the first week of October, when word of the deal first leaked, erasing $8 billion in market value.

As we warned the week the deal was announced, the structure of the transaction put selling pressure on VMware shares by proposing to water them down with a tracking stock.

Alongside $24.05 in cash, Dell offered $9.10 of a tracking stock tied to EMC's stake in VMware.

By creating an arbitrage opportunity to bet against the tracking stock — which typically trade at a discount to their underlying shares — the deal has helped drive down the value of VMWare.

Just how much of the VMware stock drop is related to deal-related arbitrage and how much to deteriorating market conditions for the company’s products is debatable, of course.

If world economic growth has slowed, no tech firm that sells mainly to the corporate market, as VMware does, would emerge unscathed from the resulting stock carnage.

Still, all the confusion associated with this deal can’t be helping sales people at VMware or EMC close deals.

The confusion included EMC first saying it would combine a newly acquired unit with VMware’s cloud business, only to scrap that plan after shareholders howled.

Given how investors punished Intel and IBM both before and after their respective fourth-quarter earnings reports this week, still more pain may be in store for stalwart VMware shareholders when the company reports next Tuesday, Jan. 26.

EMC reports the next day, so look here next week for what CEO Joseph Tucci says about the Dell transaction on his company’s conference call.

John Shinal has covered tech and financial markets for more than 15 years at Bloomberg, BusinessWeek,The San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others. Follow him on Twitter: @johnshinal.