Western Digital Corp. (WDC)

Western Digital Corporation Stock (WDC) dropped by 3.95% from $41.80 to $40.15 in the trading on Tuesday October 31, 2023. The reason why WDC stock down today include:

• Convertible notes offering: Western Digital has announced a proposed offering of $1.3 billion aggregate principal amount of convertible senior notes due 2028. Interest on the notes will be payable semiannually in arrears on May 15 and November 15 of each year, beginning on May 15, 2024. The notes will mature on November 15, 2028
• Split announcement: Western Digital has announced its decision to split its hard disk drive and NAND memory businesses, creating two separate public companies. According to the company, the change is aimed at refining the focus and operational efficiency of each business segment.

Shares of Western Digital Corporation (WDC) dropped by 9.29% from $42.18 to $38.26 in the trading on Thursday, October 26, 2023. The reasons why WDC stock down include:

• Industry Challenges: Western Digital operates in the data storage industry, which has been experiencing a downturn despite advancements in artificial intelligence. This downturn has particularly affected NAND flash and hard disk drive (HDD) storage, with dynamic random access memory (DRAM) seeing more favorable conditions.
• Failed Merger: The anticipated merger between Western Digital's NAND business and Kioxia was canceled after SK Hynix, an investor in Kioxia and a competitor, declined to approve the deal. SK Hynix believed the deal undervalued its stake in Kioxia. This cancellation added to investor pessimism.
• Sector-Wide Issues: On the same day, Seagate, Western Digital's HDD peer, reported disappointing earnings, further contributing to negative sentiment within the data storage sector. The canceled merger would have created the largest NAND flash company, but challenges in the market and valuation issues made it difficult to finalize the deal. Western Digital now faces the task of navigating a challenging NAND flash market and relying on its HDD business. The company's substantial net debt adds to its difficulties, making it a challenging turnaround story in a competitive industry.