WDC, NAND, NVM, enterprise storage systems, etc. Message Board

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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.

SNDK 200.32

+2.2%

Nov 21 9:30 AM EST

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To: Unwelcomeguest who wrote (3616)	4/16/2018 11:41:53 AM
From: Sam	1 Recommendation Recommended By Mesaverde Read Replies (1) of 4828

Here is a speculation on why STX has a much higher valuation than WDC: STX has very aggressively managed their balance sheet ever since their LBO almost 20 years ago. Becoming a public company again didn't change that, since financial guys like Luczo were still in charge. I don't really know much about their current senior management, but I am guessing that they are the same kind of financial guys. So while they have a lot more debt than WDC, a lot of fellow finance guys in charge of investing a lot of money will have a degree of trust in management's ability to manage the balance sheet that they might not have if engineers were in charge of the company (as was the case prior to Alan Shugart getting booted by Luzco a couple of years prior to the LBO). Which means (if this speculation is right) that the dividend would count for a lot. And it is pretty hefty by current standards. If the stock gets cut in half it would be over 8%, so in the current "reaching for yield" environment, that won't happen.

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