SanDisk Corp (NASDAQ:SNDK) shares are rebounding Wednesday morning after briefly falling on news that the company priced a $3.17 billion secondary stock offering. Here’s what investors need to know.
- SanDisk stock is trading near recent highs. What’s next for SNDK stock?
Secondary Sale Prices 5.8M SNDK Shares At Discount
Sandisk announced a secondary public offering of 5,821,135 SNDK shares currently owned by former parent Western Digital Corporation. The stock is being offered at $545 per share, below the latest trading price, with Sandisk itself not issuing new shares or receiving any proceeds.
The deal, expected to close Thursday, comes via an effective shelf registration statement and accompanying prospectus filed with the SEC.
Debt-For-Equity Swap Reduces Western Digital Overhang
Before the sale, Western Digital is expected to exchange the SNDK block for debt held by affiliates of J.P. Morgan Securities LLC and BofA Securities, which will act as selling stockholders and then place the shares with underwriters.
After the transaction, Western Digital will still own about 1.69 million SNDK shares but intends to dispose of them over time, potentially easing a long-standing overhang.
Technical Momentum And Bullish Trends
Technical indicators suggest that the stock is currently trading 6.5% above its 20-day simple moving average (SMA) but is significantly higher at 109.6% above its 100-day SMA, indicating a strong longer-term trend.
Over the past 12 months, shares have surged 1129.26%, reflecting substantial growth, and are currently positioned closer to their 52-week highs than lows.
The RSI is at 59.77, which is considered neutral territory, while the MACD shows a value of 62.8483, below its signal line at 69.8810, indicating bearish pressure on the stock. This combination suggests that while the stock is not oversold, the bearish MACD could be a warning sign for traders.
- Key Support: $540.00
Recent Analyst Actions
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $512.76. Recent analyst moves include:
- Citigroup: Buy (Raises Target to $750.00) (Feb. 2)
- Barclays: Equal-Weight (Raises Target to $750.00) (Feb. 2)
- Jefferies: Buy (Raises Target to $700.00) (Jan. 30)
SNDK Shares Rebound Wednesday
SNDK Price Action: SanDisk shares initially traded lower, but were up 0.98% at $596.36 at the time of publication on Wednesday, according to Benzinga Pro data.
Image: Shutterstock
Recent Comments