Sandisk's 8-for-1 split trades Nov. 20 at about $110 a share, but its price floors have never met a downturn

Sandisk▼−7.55% — Sandisk, down 7.55 percent today, the flash-memory maker Western Digital▼−6.57% — Western Digital, down 6.57 percent today spun off in early 2025 ¹, distributes the shares of its 8-for-1 stock split after the close on November 19, and split-adjusted trading begins on the 20th ². The split lands at the end of the stock's worst quarter since the spinoff: it peaked in June, has lost more than half since ¹, and fell 22% in a single session on November 5 ³.

The selling has run underneath the split since the day it was announced. Sandisk unveiled it with results on October 29↗, when the stock closed at $1,330 ⁴. The day after Nvidia▼−3.21% — Nvidia, down 3.21 percent today said Jensen Huang had resigned as chief executive, with finance chief Colette Kress holding the job in the interim ⁵, it closed Friday at $885 ⁶. A split cuts the price eight ways and changes nothing about the business ¹; one new share costs about $110, and what it buys is a position on where flash-memory prices go next.

The record quarter is not what the sellers are selling

The reported business has never been stronger: revenue reached $11 billion in the fiscal first quarter at an 85% gross margin, and management guided the next quarter higher again ². We charted that quarter the day it crashed the stock on November 2 ².

The sellers are not disputing the quarter. They are selling the year after it. Bernstein, a stock research firm, expects memory prices to normalize from the second half of 2027 into 2028 ³, and October reports of progress at CXMT↗, a Chinese memory-chip maker, knocked the stock down ³. Intel's▼−4.19% — Intel, down 4.19 percent today chief executive, Lip-Bu Tan, says memory prices have already risen "six, seven times," and expects the shortage to worsen in 2027 ⁸; some phone makers are already redesigning around cheaper memory ⁸.

What a $110 share buys is the contract book

Evercore▲+0.34% — Evercore, up 0.34 percent today ISI, a stock research firm, met Sandisk's management and kept its Outperform rating, with a target of $312.50 a share once split-adjusted↗ ⁹. The case is a deal book rather than a forecast: about half of this fiscal year's bit volume, the quantity of memory chips sold, and 67% of fiscal 2028's are already sold under multiyear agreements with price floors, price ceilings, and nearly $16.5 billion in financial guarantees ⁹. Floors cushion a glut; ceilings cap a shortage.

Evercore's argument is that the deal desk has turned a hot spot market into two years of booked volume, and that prices locked in advance deserve a premium over prices left to the cycle ⁹. But those floors were signed into a shortage and have never met a downturn, and Sandisk and its peers are building the capacity that ends one ¹.

Nvidia reports before the split trades, and it is the first test

Nvidia reports on November 17, its first results under interim leadership↗, days before the split trades ⁵. Whoever buys near $110 is not buying the record quarter ⁵. They are lending their capital to the proposition that a floor written in a shortage still pays in a glut.