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On a generally down day for tech stocks, VMware slipped on news that a large number of employee share grants may begin trading this week. The stock was down $4.19, or 6.2 %, to $63.70 in recent trading, or 61 times 2008 earnings and 43 times 2009 earnings. The Nasdaq was off 0.8 %.

Some 51.2 million shares of VMware are currently traded. According to UBS analyst Heather Bellini, about 11 million shares, or 22 % of the float, will become eligible to trade this week, as one-year grants to employees begin to vest. Another 3.5 million shares will vest in each of the next two quarters.

VMware has clawed its way back from a March low of $41.41 since posting first-quarter earnings in April that reported a still healthy revenue growth of 69 %. But the stock is well below its October high of $125, when year-over-year revenue growth was nearly 90 %.

VMware issued 33 million shares at $29 a share in an IPO.

Also check our earlier post on VMware financials.

[Source: TheStreet]