Western Digital Corp Spin-off Notes

August 23, 2024 Update

– Wedbush analyst makes the case that the upcoming spin-off will unlock significant value.
November 23, 2023 Update

Western Digital Corp (WDC) announced on Monday October 30, that it plans to split off its flash memory business, which had been struggling with oversupply issues after merger discussions with Japan’s Kioxia stalled. The split will create two publicly traded companies, with the RemainCo retaining its traditional hard-disk drive business. The separation is targeted for the second half of 2024.

Within the announcement , WDC also stated that it aims to raise capital through the sale of $1.3BN worth of convertible bonds to refinance part of its debt due in 2024. In 2016, WDC bought SanDisk for $19BN in order to help build out it’s flash memory unit. Since the pandemic, demand for flash chips has slowed, leaving the market saturated and increasing the pressure on chipmakers to consolidate.