SanDisk Stock (SNDK) Pulls Back, Western Digital Offloads $3 Billion

SanDisk's stock (NASDAQ:SNDK) has been a huge leader on US markets this year, adding 114.57% YTD, and more than 1,100% over the past 12 months. The stock has pulled back 20% from highs however, and the announcement of a substantial secondary offering has not helped, as Western Digital Corporation moves to divest a larger portion of it's remaining stake in the flash memory specialist through a complex debt-for-equity transaction valued at approximately $3.09 billion.

The SanDisk stock price closed down 5.74% lower yesterday, with a further 0.5% dip in the pre-market session. The decline came as markets digested news that Western Digital would exchange 7.51 million SanDisk shares at a price range of $535.00 to $555.00 per share.

The transaction represents a significant unwinding of Western Digital's ownership position in its former subsidiary. SanDisk itself will not participate as a seller in the offering and will receive no proceeds from either the share sale or the accompanying debt-for-equity exchange. J.P. Morgan Securities and BofA Securities are serving as joint lead book-runners for the offering, which is expected to close on February 19, 2026.

Following completion of the secondary offering, Western Digital will retain just 1,691,884 SanDisk shares, a fraction of its previous holding. The company has indicated plans to dispose of these remaining shares through subsequent exchanges for Western Digital common stock or through pro rata distributions to its own stockholders, effectively marking a complete exit from its SanDisk position.

The market reaction reflects typical concerns surrounding secondary offerings, particularly the potential supply overhang and dilutive effect on existing shareholders. While SanDisk is not issuing new shares, the introduction of 7.51 million shares into the market represents meaningful selling pressure. The discount implied by the $535.00 to $555.00 price range, well below the stock's recent trading levels above $600, could contribute to any downward pressure on shares.

Despite the near-term volatility, analyst sentiment toward SanDisk remains constructive. Citi recently raised its price target for the stock from $490 to $750, maintaining a buy rating.

For markets, the key question will be whether the stock can absorb this supply without sustained damage to its technical structure.  With the transaction set to close imminently, attention will shift to whether SanDisk can stabilize and resume its upward trajectory once the overhang is cleared.