Data storage players including Western Digital (WDC), Seagate Technology (STX), and Micron (MU), had a rough 2022 with the stocks down by more than 50%, 53% and 40%, respectively.
2023 does not appear to be any better for these data storage companies as analysts have talked about the memory market bottoming out this year. In this scenario, Western Digital could be pondering a merger.
On Thursday, shares of WDC were up in pre-market trading after Bloomberg reported that the company is in early discussions with Kioxia Holdings Corp. The report stated that the merger is looking at combining the two companies into a publicly traded one.
Kioxia is owned by Bain Capital, a private-equity firm and has a joint venture with WDC that produces flash dirves.
The two companies had also been in discussions last year in what would have been a merger worth $20 billion. However, those talks failed.
Back in June last year, WDC had indicated that it would consider separating its flash drive and HDD business after activist investors like Elliott Management had called for the company to explore a split.
Wall Street analysts rate WDC stock a Moderate Buy based on seven Buys, five Holds and two Sells.
