Sandisk Return RateBased on a comprehensive analysis of information from various sources:
The $3.09 billion secondary offering initiated by SanDisk is essentially part of the divestment process for the remaining 7.51 million SanDisk shares held by WDC after the spin-off. In essence, WDC is selling SanDisk stock to repay debt, with J.P. Morgan and Bank of America Securities appointed as underwriters (with an offering price range of $535-$555). It is expected that further announcements will follow regarding the sale of the remaining shares. This secondary offering does not increase the number of listed shares, and SanDisk itself is not raising capital.
During the post-earnings conference call on January 29th, WDC clearly stated its intention to sell approximately 7.5 million SanDisk shares, worth about $5 billion, to repay company debt. The plan to swap equity for debt was already clear at that time; the current move is merely its execution. One can refer to the conference call transcript for details.
For SanDisk's market capitalization, the market's overreaction is conducive to a full adjustment of the stock price.
Sandisk Announces Launch of Secondary Offering of Common Stock | SNDK Stock News
Sandisk Corporation has announced a secondary public offering of approximately $3.09 billion in common stock shares currently owned by its former parent, Western Digital Corporation. Sandisk will not sell any shares or receive proceeds from the offering. The shares will be exchanged for certain indebtedness held by affiliates of J.P. Morgan Securities LLC and BofA Securities, who will act as selling stockholders. The offering is made under an effective shelf registration statement with the SEC. Sandisk is a leading provider of data storage solutions based on NAND flash technology.
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