New York, Feb 18, 2026, 10:57 (EST) — Regular session.
- Western Digital gained roughly 5.5% after Sandisk’s $3.17 billion stock offering was priced for a debt-for-equity exchange.
- Sandisk has priced the offer at $545 per share, with the transaction slated to wrap up on Feb. 19.
- Traders are eyeing the pace of Western Digital’s debt reduction, and also tracking any moves involving the leftover Sandisk stake.
Western Digital Corp shares jumped roughly 5.5% to $299.65 during Wednesday morning’s session. The hard drive manufacturer is offloading part of its stake in Sandisk, its former unit, to help reduce debt.
This deal’s significance right now comes from its potential to wipe out a hefty portion of debt for Western Digital—no cash payout required. Storage names linked to AI data-center expansion have seen investor enthusiasm lately, but leverage remains a sticking point after years of volatility across the sector. (Reuters)
Sandisk plans to sell 5,821,135 shares at $545 apiece in a secondary offering, pricing the stock roughly 7.7% under Tuesday’s close. The company won’t see any proceeds—this is all existing stock. Western Digital, ahead of settlement, is set to exchange those shares for debt held by affiliates of J.P. Morgan Securities and BofA Securities, handing lenders equity in place of cash. After the swap, Western Digital will hang on to 1,691,884 Sandisk shares, which it says it’ll unload later. Closing is targeted for Feb. 19. (Business Wire)
A new SEC prospectus supplement reveals the exchange links up with $1.586 billion in term A-3 loans and another $1.5 billion in term loans—both set for cancellation if the swap goes through. The document also puts Sandisk’s planned distribution to Western Digital shareholders on Feb. 21, 2025, and details Western Digital’s previous moves to file and pare back its stake. (SEC)
Sandisk climbed roughly 1.9% to $601.77, moving in a wide band from $560.59 to $602.77 earlier in the session. That $545 offer price points to discounted shares—often a recipe for pressure during major secondary offerings.
Seagate Technology tacked on roughly 3.3%, while Micron Technology climbed 5.2%. The move comes as traders continue to favor storage and memory stocks, betting that hyperscalers—the giant cloud companies building sprawling data centers—aren’t done ramping up AI infrastructure spend. That push demands more storage gear.
Western Digital is pitching the cleanup as just one piece of its wider capital strategy. “Our capital allocation strategy balances reinvestment in the business, debt reduction, and capital returns to shareholders,” CEO Irving Tan said Feb. 3, rolling out another $4 billion in authorized buybacks. (Western Digital)
Reporting quarterly results on Jan. 29, Tan called the company’s showing “disciplined execution” aimed at demand in what he labeled an “AI-driven data economy,” with customers chasing “high-capacity HDDs”—those hard disk drives that keep data centers running. CFO Kris Sennesael pegged fiscal Q3 revenue at roughly $3.2 billion, midpoint, tying the forecast to data-center demand and stronger uptake of high-capacity drives. (Western Digital)
But the trade’s real test is whether the offering wraps up on time—and whether Sandisk shares stay resilient until settlement. A bigger drop in Sandisk would chop down the value of Western Digital’s leftover stake, undercutting the debt narrative, even if the swap does reduce borrowings on paper.
All eyes on Feb. 19’s close—investors want to see if Western Digital snaps up the last 1.7 million Sandisk shares right away. The immediate signal? Watch for debt dropping from the balance sheet, and check if buybacks accelerate once the swap wraps up.
