Western Digital (NASDAQ:WDC) stock is in the news Monday as investors react to the data storage company announcing plans to split into two businesses.
According to a press release from Western Digital, the company’s Board of Directors has approved a plan to split its HDD and Flash businesses into two separate companies. The company notes this split would be done in a tax-free manner that is expected to occur in the second half of 2024.
Western Digital notes that it came to the conclusion that it needs to spinoff its Flash business following a strategic review. The company believes that each of its businesses are ready to succeed on their own and that the split will allow them the flexibility to do so.
David Goeckeler, CEO of Western Digital, said the following about the plan:
“Importantly, 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.”
WDC Stockholder Reactions Today
Following news of the split plan, shares of WDC stock are rising higher alongside heavy trading. That has more than 7 million shares changing hands as of this writing. For the record, the company’s daily average trading volume is about 3.6 million shares.
WDC stock is up 6.5% as of Monday morning and up 32.2% since the start of the year.
Investors looking for more of the most recent stock market news will want to keep reading!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
