Western Digital Stock Pops on Merger Talks

Call volume is running at nine times the intraday average

Deputy Editor

Jan 5, 2023 at 10:57 AM

Western Digital Corp (NASDAQ:WDC) is in the spotlight today, after news that the memory chip-maker has restarted merger talks with Japan's Kioxia Holdings Corp, with the pair considering merging into one publicly traded company. At last glance, WDC was up 4.5% at $34.54.

This pop has WDC further removing itself from its Dec. 22 annual low of $29.73, though the stock's 40-day moving average appears to be keeping a cap on gains. Year-over-year, Western Digital stock is down 48.9%.

Options bulls are blasting the security in response to the news. So far, 11,000 calls have crossed the tape, which is nine times the intraday average volume. The June 45 call is the most popular, with new positions being sold to open at the January 2023 34-strike put.

Analysts are split towards WDC. Of the 17 in coverage, eight carry a "buy" or better rating, and nine a "hold" or worse. Meanwhile, the 12-month consensus price target of $43.34 is a roughly 26% premium to current levels.

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