Editors Note:

The tech crash has given us several new opportunities. Western Digital was hammered for a $9 drop on zero news.


NEW DIRECTIONAL CALL PLAYS

WDC - Western Digital - Company Profile

Western Digital Corporation, together with its subsidiaries, develops, manufactures, and sells data storage devices and solutions worldwide. It offers performance hard disk drives (HDDs) that are used in enterprise servers, data analysis, and other enterprise applications; capacity HDDs and drive configurations for use in data storage systems and tiered storage models, as well as for use in storage of data for years; and enterprise solid state drives (SSDs), including NAND-flash SSDs and software solutions that are designed to enhance the performance in various enterprise workload environments. The company also provides InfiniFlash System, a system solution that offers petabyte scalable capacity with performance metrics; higher value data storage platforms and systems; datacenter software and systems; and HDDs and SSDs for desktop PCs, notebook PCs, gaming consoles, set top boxes, security surveillance systems, and other computing devices. In addition, it offers embedded NAND-flash storage products, including custom embedded solutions; and iNAND embedded flash products, such as multi-chip package solutions that combine NAND and mobile dynamic random-access memory in an integrated package for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as in automotive and connected home applications, and NAND-flash wafers. Further, it provides HDDs embedded into WD- and HGST-branded external storage products; and NAND-flash products, which include cards, universal serial bus flash drives, and wireless drives. Additionally, the company licenses its technologies. The company sells its products under the HGST, SanDisk, and WD brands to original equipment manufacturers (OEMs), distributors, resellers, cloud infrastructure players, and retailers. It serves storage subsystem suppliers, OEMs, Internet and social media infrastructure players, and PC and Mac OEMs. Company description from FinViz.com.

Western Digital is in the sweet spot for hard drives and memory. After acquiring SanDisk last year they have been integrating memory products into their product lines and business is booming. Their hard drives are the state of the art with 10 terabyte drives now the leading edge of capacity. Their SSD drives are growing by leaps and bounds with capacities surging and prices declining.

They are currently bidding on the Toshiba NAND memory business with an $18 billion bid. Toshiba is supposed to announce the winner of the bid on Thursday. If WDC wins that bid they will be unstoppable with yet another source of highly desirable memory components. They already own half of the Toshiba business so whatever happens they will still be a part of the company. There could be a protracted legal fight if WDC is not the winner but they will still benefit.

Estimated earnings July 27th.

Shares crashed from a high of $91.94 on Friday to a low of $82.14 today. The rebound from the opening low was immediate and the stock closed at $86.64. I am looking for a return to the highs and if they win the Toshiba business we could see higher highs.

Buy Sept $90 call, currently $5.40, initial stop loss $82.85
Sell short Sept $100 call, currently $2.04, initial stop loss $82.85
Net debit $3.36


NEW DIRECTIONAL PUT PLAYS

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