Western Digital shares were up 12% in premarket trading after the company said it intends to separate its businesses in the second half of 2024.
“Separating these franchises will unlock significant value for Western Digital shareholders, allowing them to participate in the upside of two industry leaders with distinct growth and investment profiles,” said CEO David Goeckeler in a statement. Western Digital has been under pressure to consider splitting its business into two for a prolonged period, with activist Elliott Investment Management calling for the move last year.
However, the decision only looks to have come about after the collapse of a potential merger of the flash-memory business with Japan’s Kioxia Holdings. Nikkei Asia reported last week that Western Digital pulled out of talks with Kioxia. In its first-quarter earnings, Western Digital reported a quarterly loss per share of $2.17 on revenue of $2.75 billion. It was expected to report a loss of $1.98 a share on sales of $2.66 billion according to a FactSet consensus.
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