Sandisk $SNDK ( ▲ 1.66% ) shares fell after Western Digital $WDC ( ▲ 4.38% ) moved to unload more than $3 billion worth of stock in a discounted secondary offering. The shares were priced at $545 each, about 8% below the prior closing price, a typical tactic used to ensure large blocks of stock can be sold quickly.
Western Digital, meanwhile, rose on the news as investors welcomed the balance sheet improvement from the debt for equity swap tied to the transaction.
A planned exit, not a surprise move
The sale was widely anticipated. Western Digital spun off most of its flash memory business into Sandisk in early 2025 and had previously signaled plans to monetize its remaining stake within a year.
Importantly, Sandisk itself is not issuing new shares or receiving any proceeds. This is simply a major shareholder reducing its position, which can still pressure the stock due to increased supply.
Overhang still remains
After the deal, Western Digital will retain fewer than 1.7 million Sandisk shares and intends to dispose of the rest through additional exchanges or distributions to its own shareholders. That lingering stake creates a potential overhang, as investors may expect further sales down the line.
Large secondary offerings often cause short term turbulence, especially for stocks that have rallied strongly. Even when the fundamentals remain intact, the sudden influx of shares can weigh on prices until the market absorbs the supply.