Elliott's $1B push split Western Digital into hard drives and SanDisk

Western Digital had bought SanDisk for $19 billion in 2016, hoping that combining hard-disk drives and flash memory would create synergies. Instead the two units, with very different capital cycles and customers, constrained one another and the stock lagged.

In May 2022 Elliott Management disclosed a stake of almost $1 billion (about 6%) and wrote to the board that the SanDisk acquisition was 'not working well' and that Western Digital would be better off separating flash and hard drives. Elliott offered more than $1 billion of incremental capital and said the shares could reach at least $100, arguing that a full separation could let both HDD and Flash be more successful and unlock significant value.

Western Digital opened a strategic review, and in October 2023 its board authorized a plan to split the two businesses. On February 21, 2025 the separation was completed via a pro-rata distribution of 80.1% of SanDisk's shares to Western Digital holders; Western Digital kept a 19.9% stake, later sold down to retire debt.

Western Digital separated SanDisk in February 2025, distributing 80.1% of it to shareholders and later monetizing its retained stake.

Elliott's letter quantified the value gap with a $100-plus share price target.

Combining two very different businesses hid value and slowed both units.

Management had resisted ending the SanDisk thesis; the activist forced a review.

A tax-free spin-off let shareholders own each business directly.

Putting two businesses with different capital economics under one roof can hide value; an activist's letter can push a management that resisted a break-up to do it.

SanDisk began trading on Nasdaq as an independent flash company in February 2025. Western Digital monetized its retained stake, exchanging 21.3 million SanDisk shares for $800 million of term-loan principal in June 2025 and planning to exit the position within a year. Elliott's separation thesis was ultimately executed, giving holders direct exposure to each business.