WDC Stock Alert: Why Western Digital Shares Are Up 10%

Shares of Western Digital are ripping higher on Monday. That’s as WDC stock closed up 11%, despite an overall stock market that was just above flat for the session.

The rally comes as talks between Western Digital and Kioxia are in progress. Reportedly, the two sides are gaining momentum in their merger talks.

Western Digital also has a joint venture with Kioxia, so a merger between the two firms could go rather smoothly. Not to mention, there are some obvious synergies and overlaps between the two firms. As such, it would not be surprising if the deal received some antitrust pushback from regulators.

According to the reports, “under the transaction being discussed, the new company would be 43% owned by Kioxia and 37% owned by Western Digital.” Further, “the remainder by existing holders of the companies.”

A deal should not be too surprising at this point. Not only was it reported on at the beginning of the year, but activists have been pushing to unlock value.

Specifically, “Activist investor Elliott Management, which owns convertible preferred shares in Western Digital, has pushed the U.S. company to split off its flash-memory business from its hard-drive division since investing in the stock in 2022.”