Toshiba shares jump 22% as Western Digital ruling approaches

Will the courts take side with Western Digital or Toshiba?

Toshiba shares jump 22% as Western Digital ruling approaches

Toshiba shares jump 22% as Western Digital ruling approaches

The past few months have been turbulent for Toshiba, who are suffering from a huge financial black hole within the company after sustaining huge losses from their failed Westinghouse Nuclear unit in the US.   
This has left Toshiba in a dire situation, where they need to raise a huge sum of money quickly, with the sale of part of their memory division seeming like the ideal solution. Since then Western Digital has sought to block any potential deal and acquire this portion of Toshiba for itself, at what is said to be a lower price than other potential investors.  
Toshiba is currently in partnership with Sandisk, who are now owned by Western Digital, with both companies working together on certain technologies. Western Digital does not want anyone else to buy part of Toshiba's Memory Unit in order to prevent competitors from accessing Toshiba's IP, potentially allowing them to watch up with Toshiba/Western Digital's memory technology. 
This has lead Toshiba to file a lawsuit against Western Digital, a case that was heard on July 14th and is now set to be resolved on July 28th. With the announcement of the ruling date, Toshiba's stock price has increased by 22%, with investors seeming confident that the courts will side with Toshiba and not Western Digital. 

Toshiba and the Toshiba Memory Corporation states that Western Digital are exaggerating their consent right and are actively interfering with the sale of TMC by lying to potential bidders. Toshiba also alleges that Western Digital is improperly obtaining TMC's trade secrets by moving Sandisk personnel to Western Digital (Sandisk's parent company), utilising Sandisk/Toshiba's collaboration efforts to access confidential information. 

Toshiba shares jump 22% as Western Digital ruling approaches


The sale of a portion of Toshiba's memory division is expected to raise $18 billion for the company, though a deal is not expected to go through until mid-August. 

Right now there is no shortage of potential investors for Toshiba's memory division, as at the time of writing it is easily one of Toshiba's most profitable businesses. 


You can join the discussion on Toshiba's court battle with Western Digital on the OC3D Forums


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