|The most recent actions of Toshiba have tipped their hand. While they will still sell to Western Digital, they cannot currently do so without losing face; they have a hatred for Western Digital, based in culture clash, and feel it dishonorable to sell to them. Yet they have no other choice due to consent rights.|
For this reason, I now believe they will in fact announce a signed deal with another company, because this will be seen as the honorable thing to do. The court has already ordered that Toshiba must provide two weeks notice of their intent to ink a final deal. This event has not yet happened - today's announcement is about discussions only, and not about accepting an offer.
The reason the court ordered this notice was to give Western Digital time to seek a restraining order against Toshiba from signing the deal. Western Digital will have no problem showing irreparable harm should the deal go through, and the court will issue the order preventing the signing pending arbitration.
At that point the game changes. The court has now interfered with Toshiba's honorable intent, prevented a deal, and placed Toshiba stakeholders at grave risk. At that point, Toshiba can sell to Western Digital without losing face - they will say this wasn't what they wanted to do, but are selling to Western Digital in order to avoid harm to stakeholders. This will be seen as honorable.
How to play this? Buy when the announcement is made that they intend to finalize a deal with another party. I see the deal with Western Digital occurring within 6 weeks of that event.
While this may be nerve rattling to some, Western Digital is on solid legal ground, and the court has already sided with Western Digital several times. In the meantime, all the announcements provide good trading opportunities for those who wish to take advantage. My 5 year target remains at $500. You can just jump in at these levels, collect a solid dividend for a few years, and reap the great rewards to come.