Western Digital agrees to buy SanDisk for about $19B
bloomberg.com
Western Digital agrees to buy SanDisk for about $19B
1–10 of 50 posts
Re: Western Digital agrees to buy SanDisk for about $19B
#2These companies both sound like bad western tech crossover movies from the 80's. This was bound to happen.
Re: Western Digital agrees to buy SanDisk for about $19B
#3This sucks for consumers. Prices are already way to high for HDs and don't seem to come down anymore. It is as if there is some sort of price fixing going on.
Re: Western Digital agrees to buy SanDisk for about $19B
#4I always have thought that companies were bought for a price of it's market value (stock price * number of stocks), or if someone did not wanted pay all in cash they would've tried to compensate in other ways until market value is reached.
But here WD bought SD for ~85-86$ per share, when it was worth ~75$ per share. It's at least 13% more.
Does it simply mean that WD hopes that SD will rise in value rapidly? Or I imagined company buying evaluation wrong?
Re: Western Digital agrees to buy SanDisk for about $19B
#5I always have thought that companies were bought for a price of it's market value (stock price * number of stocks), or if someone did not wanted pay all in cash they would've tried to compensate in other ways until market value is reached. But here WD bought SD for ~85-86$ per share, when it was worth ~75$ per share. It's at least 13% more. Does it simply mean that WD hopes that SD will rise in value rapidly? Or I im…
They issued $18 bln in new debt. Does that mean they only paid $1 bln for it?
Re: Western Digital agrees to buy SanDisk for about $19B
#6I always have thought that companies were bought for a price of it's market value (stock price * number of stocks), or if someone did not wanted pay all in cash they would've tried to compensate in other ways until market value is reached. But here WD bought SD for ~85-86$ per share, when it was worth ~75$ per share. It's at least 13% more. Does it simply mean that WD hopes that SD will rise in value rapidly? Or I im…
When buying a healthy company there's generally a premium required, which is booked as "good will" https://en.wikipedia.org/wiki/Goodwill_(accounting)
And all too often written off after the acquisition doesn't pan out.
Re: Western Digital agrees to buy SanDisk for about $19B
#7This sucks for consumers. Prices are already way to high for HDs and don't seem to come down anymore. It is as if there is some sort of price fixing going on.
Yeah seriously, SanDisk own patents to flash IIRC, their stuff is always less than their competitors.
I hope WD isn't going to jack up prices.
Re: Western Digital agrees to buy SanDisk for about $19B
#8I always have thought that companies were bought for a price of it's market value (stock price * number of stocks), or if someone did not wanted pay all in cash they would've tried to compensate in other ways until market value is reached. But here WD bought SD for ~85-86$ per share, when it was worth ~75$ per share. It's at least 13% more. Does it simply mean that WD hopes that SD will rise in value rapidly? Or I im…
When buying a healthy company there's generally a premium required, which is booked as "good will" https://en.wikipedia.org/wiki/Goodwill_(accounting) And all too often written off after the acquisition doesn't pan out.
>> after the acquisition doesn't pan out.
Considering that this is common , one wonders - wouldn't it be better investing the $19 billion in innovation, even if in non-related fields ?
Re: Western Digital agrees to buy SanDisk for about $19B
#9I always have thought that companies were bought for a price of it's market value (stock price * number of stocks), or if someone did not wanted pay all in cash they would've tried to compensate in other ways until market value is reached. But here WD bought SD for ~85-86$ per share, when it was worth ~75$ per share. It's at least 13% more. Does it simply mean that WD hopes that SD will rise in value rapidly? Or I im…
They issued $18 bln in new debt. Does that mean they only paid $1 bln for it?
That depends on who issued the debt and what happened after that. If WD issued the debt, they could use that incoming cash to pay the old stockholders to gain the shares in SanDisk. That would be a real cash outflow. Bigger company after the transaction, and bigger debt.
Alternative is that WD pays cash to stockholders they might have had lying around. Then issue debt in SanDisk and pay dividend upstream from Sandisk to WD afterwards. Bigger company, and bigger debt result, only different place for the debt. Sometimes tax incentives help which route to choose (private equity often loads up firms on debts, since interest is deductible).
Only way to 'pay less' would be (happens sometimes) that you can buy a company that holds a lot of cash, but that has a relatively low valuation one way or the other. Perhaps stockholders sense risks and don't expect dividends (market cap in that sense is expected value of future earnings plus lots of noise). Then you buy company, and use the cash for superdividend right away. Bigger company results, but with relatively stronger solvency since you've paid part from cash that was 'undervalued'.
Re: Western Digital agrees to buy SanDisk for about $19B
#10I always have thought that companies were bought for a price of it's market value (stock price * number of stocks), or if someone did not wanted pay all in cash they would've tried to compensate in other ways until market value is reached. But here WD bought SD for ~85-86$ per share, when it was worth ~75$ per share. It's at least 13% more. Does it simply mean that WD hopes that SD will rise in value rapidly? Or I im…
They issued $18 bln in new debt. Does that mean they only paid $1 bln for it?
[deleted]