The decline was due to arbitrage activity, and fear mongering based on STX issues. It was not due to nefarious activity by Chinese interests.
Your reasoning is both convoluted and not supported by the facts. You assert that the Chinese delayed approval in order to make the price of WDC go down. But just how does this happen? The only possible relationship between declining WDC price and non-approval is concern that the acquisition would not be approved. But if there were in fact any concern of non-approval, the arbitrage discount of SNDK to WDC would not have been at the 1-2% level in the weeks coming into approval. A 10-20% discount, or more, would have been more appropriate. Clearly the market did not believe the deal was not going to happen, and is unrelated to the declines in Western Digital stock.
Clearly you don't have a handle on the Unispendour deal. That offer was not withdrawn "after a couple of months," but rather 5 months later, after CFIUS decided to proceed with an investigation. Interesting that I don't hear you talking about CFIUS "hemming and hawing" while you take your anti-Chinese stance. You lack basic respect for a culture that is not your own.
The deal called for not only an investment in exchange for a 15% stake in the company, but a board seat as well. While you believe the deal was withdrawn in order purchase at lower prices, your thesis has a couple of problems:
(1) Purchasing at lower prices does not provide a board seat, and
(2) Purchasing a 15% stake on the open market does not override CFIUS concerns, and such an ownership interest can be refused by CFIUS. Whether open-market or negotiated transactions, CFIUS power is identical.
Unlike you, I do not attempt to time my purchases and find a bottom, nor do I cry "woe is me" if the stock declines below my purchase price. This stock was a great investment opportunity in the 40's, and an even better investment opportunity today. This is not a short term trade, and will be held for many, many years. My annual dividend return will be far in excess of 4%, and I am quite satisfied with this return.
I held Sandisk for 18 years, with split adjusted purchase prices ranging from under $2 to the mid $20's. I have done quite well, and really not concerned that I didn't purchase all of it at the bottom.
I'm glad you've finally come around and recognized the potential of this stock You've said time and time again that you won't buy a stock with so much debt, but now you're ready to buy the stock. Clearly debt has not been your concern, and rationalization has been at play.
Congratulations on picking a bottom, and identifying with 20/20 hindsight that the stock was too high in the $40's. Picking bottoms is not what I try to do. I identify companies with exceptional potential, and build positions at reasonable prices. Trying to pick bottoms is a fool's game, and the way to miss many exceptional opportunities. |
