Western Digital stock drops despite receiving $900 million boost from Elliott, Apollo Management
Yahoo Finance Live anchors discuss the decline in stock for Western Digital. (Apollo is the parent company of Yahoo Finance.)
BRAD SMITH: We start with this today. Western Digital is falling despite getting a $900 million investment in preferable stock from Apollo Global Management and Elliott Management. The preferred stock will have a conversion rate of $47.75 a share here. You're seeing shares move lower by about 3 and 3/4%, but even with that, the quarter wasn't great for Western Digital as well.
JULIE HYMAN: No, I mean anything that is sort of touched by PCs right now is not doing great. They make NAND, NAND flash memory. And so that seems to be what's to blame here, that people are overweighting the quarter. I mean, also, it's not a straight investment from Apollo and Elliott if this convertible preferred stock means at some point, when it converts back to shares, that it'll dilute value for existing shareholders. So maybe that's a problem, too.
BRIAN SOZZI: And of course, as we should mention, Apollo is the parent company of Yahoo Finance. Also, Western Digital getting a new board member, Reed Raymond. I believe he's on the Yahoo board. He will be joining that Western Digital board as well. But again, a challenging quarter for this company.
Margins down almost 1,000 points sequentially.