Sandisk drops after Western Digital confirms plan to unload $3 billion in stock at a discount
Western Digital is cashing in more of its Sandisk position.
The hard drive seller is exchanging more than $3 billion in Sandisk shares as part of a debt-for-equity swap.
This secondary offering was priced at $545 per share, a discount of roughly 8% to where Sandisk closed on Tuesday.
Shares of Sandisk are down nearly 3% in premarket trading as of 5:50 a.m. ET, while Western Digital is up more than 2%.
The two companies were once one, but Western Digital spun off a little more than 80% of its flash drive business (which would become Sandisk) in February 2025, and already exchanged the lion’s share of what remained in a separate debt-for-equity swap in June.
This move was very, very well telegraphed by Western Digital, which recently confirmed plans to monetize its Sandisk position before the one-year anniversary of that split (February 21). And Sandisk’s press release makes clear that the company is not the one selling more stock or making any money off of this.
That being said, being a high-flying stock that has a Bloomberg headline with “secondary offering” in it could, in theory, spark some turbulence. Particularly when that happens at a discount.
After this transaction, Western Digital will own a little less than 1.7 million shares of Sandisk, and plans to dispose of the rest through either exchanging these shares for its own (effectively, a buyback) or giving them to its shareholders.
This secondary offering was priced at $545 per share, a discount of roughly 8% to where Sandisk closed on Tuesday.
Shares of Sandisk are down nearly 3% in premarket trading as of 5:50 a.m. ET, while Western Digital is up more than 2%.
The two companies were once one, but Western Digital spun off a little more than 80% of its flash drive business (which would become Sandisk) in February 2025, and already exchanged the lion’s share of what remained in a separate debt-for-equity swap in June.
This move was very, very well telegraphed by Western Digital, which recently confirmed plans to monetize its Sandisk position before the one-year anniversary of that split (February 21). And Sandisk’s press release makes clear that the company is not the one selling more stock or making any money off of this.
That being said, being a high-flying stock that has a Bloomberg headline with “secondary offering” in it could, in theory, spark some turbulence. Particularly when that happens at a discount.
After this transaction, Western Digital will own a little less than 1.7 million shares of Sandisk, and plans to dispose of the rest through either exchanging these shares for its own (effectively, a buyback) or giving them to its shareholders.
