S&P 500
7,507.80
-0.22%
Dow Jones
51,595.40
-0.32%
Nasdaq 100
30,411.80
-0.23%
Russell 2000
2,975.48
-0.09%
FTSE 100
10,384.80
-0.34%
Nikkei 225
71,987.20
+0.02%

Technology

Disk Drive Maker Western Digital Gets $3.8 Billion Equity Investment

Photo of Paul Ausick
By Paul Ausick Updated Published
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Hard Drive

Thinkstock
Western Digital Corp. (NASDAQ: WDC) announced Wednesday morning that it has reached an agreement with a subsidiary of China-based Unisplendour (Unis) under which the Chinese firm will make an equity investment of $3.775 billion in the disk drive maker. Unis will purchase newly issued shares of stock in Western Digital for a price of $92.50 per share, a premium of 34% to the stock’s closing price on Tuesday of $69.37.

Unis will hold a stake of approximately 15% in Western Digital and will be able to nominate one member to the company’s board of directors. The Chinese firm has accepted a five-year standstill agreement and voting restrictions and has also agreed to a five-year lockup on its shares, with a limited number of shares becoming available for transfer each year.

A back-of-the-envelope calculation puts the number of shares Unis has acquired at around 40.8 million. At Tuesday’s closing price Western Digital’s market cap was $16.04 billion, and the Unis investment raises that to $19.815 billion. Divided by 272 million shares outstanding after the Unis transaction, and Western Digital’s share price gets a boost to around $72.85.

Shares traded up more than 12% in Wednesday’s premarket session, at $78.05 in a 52-week range of $67.87 to $114.69. The consensus price target on the stock is $98.95.

The deal also appears to be having a positive impact on shares of Seagate Technology PLC (NASDAQ: STX). Shares traded up nearly 6% in the premarket, at $44.24 in a 52-week range of $41.58 to $69.40. Seagate’s stock posted that 52-week low Tuesday.

ALSO READ: 5 High-Dividend Blue Chip Stocks on Sale After Market Sell-Off

DISCLOSURE:
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org). Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees. Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org). There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options  Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation.
Follow 24/7 Wall St. on Google
Photo of Paul Ausick
About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

Latest Podcast Episode

SpaceX Goes Public! Is It A Launch Pad For Investors Or A Black Hole?

Play

41 min
Apple Podcasts Spotify

Continue Reading

Chris Lange |

Why Western Digital’s Massive Investment From China Pleases Investors

ThinkstockChinese companies are continuing to make moves within the American tech sector, and the most recent target is Western Digital…

Premarket Movers Headed Higher: Western Digital (WDC), Charter Communications (CHTR), Arista Networks (ANET) Global Payments (GPN)
Paul Ausick |

Premarket Movers Headed Higher: Western Digital (WDC), Charter Communications (CHTR), Arista Networks (ANET) Global Payments (GPN)

Tuesday's premarket session has seen some solid upward moves from based on earnings and an announced spinoff.

Is Western Digital’s Acquisition of SanDisk Stalled or Finished?
Paul Ausick |

Is Western Digital’s Acquisition of SanDisk Stalled or Finished?

When disk drive maker Western Digital agreed last October to acquire flash memory maker SanDisk, the agreement was complicated by…

Before the Bell: Twitter Now a Brand, Not a Company; Plus, Cannabis Capers
Paul Ausick |

Before the Bell: Twitter Now a Brand, Not a Company; Plus, Cannabis Capers

U.S. markets closed mixed on Monday and were trading slightly in the green in Tuesday's premarket, no thanks to an…

Jon C. Ogg |

What Price SanDisk Might Really Get in a Buyout

Bloomberg reported late on Tuesday that Micron Technology and Western Digital were both in talks with SanDisk about a possible…

Best Earnings Reports for Week Ending April 2, 2021
Paul Ausick |

Best Earnings Reports for Week Ending April 2, 2021

Here are five stocks that reported earnings in the past week and all posted better-than-expected numbers and investors rewarded them…

Morning Blast: Tighter Chip Export Rules Hit Nvidia, AMD; BlackRock Looks Good for Bitcoin ETF
Paul Ausick |

Morning Blast: Tighter Chip Export Rules Hit Nvidia, AMD; BlackRock Looks Good for Bitcoin ETF

The U.S. Commerce Department reportedly is considering tightening its restrictions on chip exports to China.

Western Digital Gains on Solid Q2 Guidance Update
Chris Lange |

Western Digital Gains on Solid Q2 Guidance Update

Western Digital shares saw a handy gain early on Wednesday after the company issued an update to its fiscal second-quarter…

Meme Stock Movers for 9/8: Meta Materials, Nio, Support.com, Vinco Ventures and More
Paul Ausick |

Meme Stock Movers for 9/8: Meta Materials, Nio, Support.com, Vinco Ventures and More

Wednesday morning's biggest movers weren't meme stocks but the more usual biotechs with good news, IPOs with a bang and…

Top Gaining Stocks

CarMax
KMX • Vol: 7,330,419
Corning
GLW • Vol: 22,800,969
Intel
INTC • Vol: 233,719,006
Super Micro Computer
SMCI • Vol: 68,465,534
Enphase Energy
ENPH • Vol: 13,978,376

Top Losing Stocks

Accenture
ACN • Vol: 41,744,333
EPAM Systems
EPAM • Vol: 5,636,587
Cognizant
CTSH • Vol: 61,311,400
Coterra Energy
CTRA • Vol: 73,319,495
Kroger
KR • Vol: 26,704,230