Thread,
Interesting release below. It is significant in this sense. WDC is ponying up more dilution then heretofore known about. Secondly, it seems to signal that there is no serious discussions underway about a merger with a larger company. (This latter was frankly a concern I had with the short and a reason for the tight stops I have placed all the way down.) I wonder if anyone else can read the release below and tell me who Crag is and what they do? Look for a possible gap down tomorrow as retail investors digest the news tonight.
Alan, as to a BK by WDC it isn't even in the cards yet IMO.
Best,
Stitch
Tuesday February 2, 1:22 pm Eastern Time
Company Press Release
SOURCE: Western Digital Corporation
Western Digital Acquires Crag Technologies in Step to Develop Additional Components for OEM Customers' Storage Solutions
IRVINE, Calif., Feb. 2 /PRNewswire/ -- Western Digital Corporation (NYSE: WDC - news) announced today that it has acquired Crag Technologies, a San Jose-based startup company, for approximately $12 million in stock. The acquisition will result in a one-time charge for in process research and development of approximately the same amount in the Company's third quarter ending March 27, 1999.
With expertise in systems software and hardware, Crag has focused on developing storage solutions for NT servers since its inception. Crag will be operated as a wholly owned subsidiary of Western Digital under the leadership of Mike Williams, senior vice president and general manager, who will report to Chuck Haggerty, chairman, president and chief executive officer of Western Digital. Western Digital indicated that it plans to continue Crag's development efforts and expects to ship its first products developed by the new unit within a 9-12 month time frame.
Commenting on the acquisition, Haggerty stated, ''The acquisition of Crag is a step in Western Digital's overall strategy of leveraging our core strengths in rotating magnetic storage to develop additional components for OEM customers' storage solutions and to enhance our business model.
''The explosive growth of the Internet and of faster servers has placed increasing value on the storage, management and protection of data. Improving users' ability to convert ever-growing amounts of stored data into knowledge and enabling them to use it for competitive advantage is a tremendous opportunity in the storage industry. The acquisition of Crag will strengthen Western Digital's abilities to help OEM customers address this challenge and to capture value for accomplishing this mission.''
Western Digital Corporation is a leader in information storage products and services. The company designs and manufactures hard drives for personal and enterprise-wide computing, and markets them to leading systems manufacturers and selected resellers under the Western Digital brand name. Western Digital is the first Fortune 500, multinational company to have been awarded company-wide ISO 9001 registration, linking all WD organizations with a consistent global standard for quality processes. The company was founded in 1970 and has long been noted for its storage and end-market systems-level design knowledge. The company's World Wide Web home page can be found at westerndigital.com.
This release contains forward-looking statements, including statements relating to the charge to be incurred in connection with the acquisition of Crag, the shipment of Crag's first products, and Western Digital's strategy of developing additional storage solution components and helping address the challenges of the growth of the Internet and of faster servers. The forward looking statements are based on current management expectations, and actual results may differ materially as a result of several factors, including: the extent to which the actual special charge may vary from current estimates; successful development of Crag's first products and of additional storage solution components; acceptance by Western Digital's customers of these products and components; business conditions and growth in the enterprise computing industry; and other factors discussed in the Company's Form 10-K for the year ended June 27, 1998, its most recent Form 10-Q, and its other SEC filings. Western Digital undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.
SOURCE: Western Digital Corporation
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