SCHEDULE: Western Digital Discloses 5.2% Sandisk Stake, Cedes Voting Rights Post-Separation

Western Digital Corporation has disclosed a 5.2% beneficial ownership stake in Sandisk Corporation, comprising 7,513,019 shares, while relinquishing voting power through a proxy agreement as part of their separation.

Summary

• Western Digital Corporation beneficially owns 7,513,019 shares of Sandisk Corporation common stock.
• This ownership represents 5.2% of Sandisk Corporation's common stock outstanding.
• The percentage is calculated based on 145,299,942 shares of Sandisk common stock outstanding as of May 19, 2025.
• Western Digital Corporation holds sole dispositive power over these shares but possesses no sole or shared voting power.
• The lack of voting power stems from a Stockholder's and Registration Rights Agreement, dated February 21, 2025, which granted Sandisk Corporation a proxy to vote these shares in proportion to votes cast by other Sandisk stockholders.

Sentiment

Score: 5

Explanation: The document is a factual disclosure of beneficial ownership and a proxy agreement, containing no performance metrics or forward-looking statements that would indicate a positive or negative sentiment.

Positives

• Western Digital Corporation retains sole dispositive power over its 7,513,019 shares of Sandisk Corporation common stock, allowing for future sale or transfer.

Negatives

• Western Digital Corporation has no voting power over its 5.2% stake in Sandisk Corporation, limiting its influence on corporate governance and strategic decisions.

Risks

• Western Digital Corporation's inability to exercise voting power over its significant stake in Sandisk Corporation, due to a proxy agreement, limits its influence on Sandisk's corporate governance and strategic decisions.

Future Outlook

NA

Management Comments

• Western Digital Corporation granted to Sandisk Corporation a proxy to vote the shares of Sandisk Corporation common stock owned by Western Digital Corporation in proportion to the votes cast by Sandisk Corporation's other stockholders.
• As a result, Western Digital Corporation does not exercise voting power over any of the shares of Sandisk Corporation common stock that it beneficially owns.

Industry Context

This Schedule 13G filing reflects the ongoing corporate restructuring and separation activities common within the technology and semiconductor industries, particularly in the data storage sector where both Western Digital and Sandisk are prominent players. The disclosure of a significant, non-voting stake by a former parent company highlights the complex post-separation ownership structures that can arise.

Comparison to Industry Standards

• The filing of a Schedule 13G for a beneficial ownership exceeding 5% is standard practice for institutional investors or corporate entities, aligning with SEC regulations.
• The specific arrangement where Western Digital retains dispositive power but cedes voting power via a proxy to Sandisk is a unique aspect stemming from their corporate separation, rather than a typical investment strategy. This contrasts with activist investors who typically seek to gain voting control to influence company direction, or passive investors who might hold a stake without such a specific voting agreement.

Corporate Governance

Related Party Transactions

• A Stockholder's and Registration Rights Agreement, dated February 21, 2025, was entered into between Western Digital Corporation and Sandisk Corporation, granting Sandisk a proxy to vote Western Digital's shares.

Stakeholder Impact

• Sandisk Shareholders: The proxy agreement ensures Western Digital's shares are voted in line with other shareholders, preventing a large block from independently influencing votes.
• Western Digital Shareholders: Western Digital retains economic interest in Sandisk through its ownership but has no voting control over Sandisk's corporate decisions.

Key Dates

Keywords

Sandisk, Western Digital, Schedule 13G, beneficial ownership, common stock, proxy agreement, corporate separation, SEC filing, data storage, semiconductor