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From: SiliconAlley10/5/2017 1:50:13 PM
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For those who may take solace in Bain's desire to work with Western Digital, please remember that Bain would not even have majority control of TMC. Without Toshiba, this will only be resolved in the courts and arbitration. The Bain announcement is essentially feel good PR prior to the Toshiba shareholder vote.

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From: SiliconAlley10/5/2017 2:24:26 PM
1 Recommendation   of 3409
 
For anyone that may have immediately reinvested their SanDisk cash in Western Digital, and sold at the market open today, your effective value realized out of each SanDisk share was just under $180.

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From: SiliconAlley10/5/2017 2:32:02 PM
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Markets don't go straight up, and they don't go straight down. When markets reverse, based on deteriorating fundamentals, there are always opportunities to exit. This week has been one of lower highs and lower lows, and absent any substantial fundamental changes, the trend is now down. New reports are being digested, and next week will be natural sequelae of digestion.

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From: SiliconAlley10/5/2017 3:50:19 PM
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Should be hearing from Goldman and Citi pretty soon, and don't expect it to be pretty.

Off topic, but anyone wanting my current favorite pick is welcome to private message me.

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From: SiliconAlley10/5/2017 5:50:38 PM
2 Recommendations   of 3409
 
Very good summary of the issues Deutsche Bank has cited in their most recent report:

benzinga.com

What most people don't realize right now is that this is no longer an issue about consent rights - Western Digital has them, and they will be upheld by the arbitrators. It is now an issue about future supply. While Western Digital argues they are entitled to participate in future expansion, those rights are far from clear when it comes to expansion outside of the current fabs.

Holding the stock right now is a bet that supply concerns will be resolved. With Toshiba's deep seated hatred toward Western Digital, it is anyone's guess how this issue will play out.

Upholding consent rights may be nothing more than winning the battle, losing the war. While another poster has indicated that this will have no effect on earnings in the next two quarters, ignoring a potential interruption to supply is just plain silly. Traders are not going sit around waiting to see what happens, and sell the stock when supply issues rear their ugly head. They will derisk the stock now, and buy if and when a continued supply is ensured.

Yes, things can change tomorrow, but this is nothing more than a roll of the dice. If you are investing, and not gambling, this is the time to exit. You can always get back in when the odds are better stacked in your favor.

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From: SiliconAlley10/5/2017 5:53:58 PM
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Given the current state of the WD/Toshiba relationship, and absent any resolution on long term supply out of Fab 6 and beyond, my near term downside target is $60. More downgrades are on their way, highlighting supply concerns, and the stock will be derisked.

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To: SiliconAlley who wrote (2604)10/5/2017 5:58:09 PM
From: franklin1
   of 3409
 
Have you taken a short or holding Puts on WDC

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To: franklin1 who wrote (2605)10/5/2017 6:17:09 PM
From: SiliconAlley
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No, I would not short this stock due to news risk. I am sidelined and waiting for reentry, if and when there is clarity on long term supply continuity. I have been selling all week, and sold the remainder of my shares at today's market open.

While one could consider shorting this stock in concert with the purchase of a protective call to limit risk, I am personally not comfortable playing the downside.

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From: SiliconAlley10/5/2017 10:11:45 PM
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This post from another board provides a good example of who is buying the stock under current conditions:

"Added WDC to long term account as it hovers about 200MA support. Pays decent dividend and think Toshiba dispute resolves favorably"

These are purely technical traders, essentially rolling the dice that fundamentals will change in their favor. While 200 day MVA is a great trading tool for a fundamentally sound stock, it is fool's folly for those who are oblivious to the deteriorating fundamentals and subsequent risk.

The support for the stock will disintegrate as these traders run out of ammunition, however this is exactly the support that provides opportunity for early exit.

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To: SiliconAlley who wrote (2606)10/6/2017 7:08:41 AM
From: joncon63
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So did Milligan over play, or completely misplay, his hand? Should BOD oust him to repair relationship with Toshiba?

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