I have 0% knowledge of Toshiba or business leading experience but am scratching my head that their solution is to sell off their best earning division? Are they that much in trouble? They can not let the other division go bankrupt? Is it like Japanse pride/stubbornness to let one division destroy a entire company or laws?
Many many questions. And on a side note that is some cold hard business strategy from WD, not sure if i would have the stomach for it but smart move I guess. When are the regulators going to stop WD from buying up eveything? HGST was already so so ...
The entire HD/SSD market could make their own game of thrones tv show xD. Just needs a fancy title.
"They can not let the other division go bankrupt?" It already is in chapter 11 bankruptcy, but that does not mean, that the whole thing is just solved for Toshiba. Westinghouse is reportedly nearly 10 billion in debt and Toshiba lost 9 billion in their last financial year. And my guess is that this being their nuclear division, they have extensive contracts that cannot just be ignored because their subsidiary went bankrupt.
Memory is one of the most successful not the most, that's key there. But corporate politics is at work too of course, probably the biggest stockholders have a bigger personal investment in other areas of the company.
It could be a bit tricky depending on just how profitable it is, and what the agreements are like with Western Digital. WD definitely has some rights here when it comes to this joint venture - it's their money and IP mixed in with Toshiba's, and they (Toshiba) can't just take their marbles and go home without some consideration going to WD.
Yes Toshiba the company has a guaranteed delivery contract (the utility guaranteed to pay $X regardless of cost and if Toshiba brings it in under the make extra profit and if it comes in over they get stuck with the costs) on several nuclear reactors that are about 10 Billion over budget currently and by the time they are done it will cost Toshiba about $20 billion.
That's why the decided to sell the whole division, they needed $20 billion yesterday or the entire company is insolvent.
"I have 0% knowledge of Toshiba or business leading experience but am scratching my head that their solution is to sell off their best earning division? Are they that much in trouble?" ------------------------------------------------------------------------------- Ummm.......Yeah
and mostly due to the scumbaggery of upper management
mostly
Finding out that the Foxconn and Broadcom bids were fake or rigged by Toshiba Management would not surprise me in the least
I'm sure there are a few more surprises in store before this sale goes through
Never bid above market value for a company like this one NEVER!
Toshiba is now paying the price for sticking their toes into what seems like every single industrial sector possible. Their nuclear power division in the U.S. (Westinghouse Electric) is bleeding cash and they need money quick. Lots of it. Like billions.
The only division that can come up with that amount of scratch is the chip/NAND division.
I hope Micron gets it, but I'd be OK with SK Hynix winning out also. First, we shall see what becomes of this legal boondoggle.
Toshiba seems to be saying...
"I say we take off and nuke the entire site from orbit. It's the only way to be sure." -Ellen Ripley
When WD bought their stake at Toshiba Nand's business, it was the Japanese company who led the way for the American who came late to this game. Now it looks like the later is throwing its heavy weight to block their helper's way out, in a hostile manner at a very inappropriate moment. ///Something reminiscent of other moves from big companies of the same origin.
Apple could have participated in this drama as they can save money in the long run while offering performance beyond a competitor could, such as Samsung.
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11 Comments
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plopke - Tuesday, May 23, 2017 - link
I have 0% knowledge of Toshiba or business leading experience but am scratching my head that their solution is to sell off their best earning division?Are they that much in trouble?
They can not let the other division go bankrupt?
Is it like Japanse pride/stubbornness to let one division destroy a entire company or laws?
Many many questions.
And on a side note that is some cold hard business strategy from WD, not sure if i would have the stomach for it but smart move I guess. When are the regulators going to stop WD from buying up eveything? HGST was already so so ...
The entire HD/SSD market could make their own game of thrones tv show xD. Just needs a fancy title.
Death666Angel - Tuesday, May 23, 2017 - link
"They can not let the other division go bankrupt?"It already is in chapter 11 bankruptcy, but that does not mean, that the whole thing is just solved for Toshiba. Westinghouse is reportedly nearly 10 billion in debt and Toshiba lost 9 billion in their last financial year. And my guess is that this being their nuclear division, they have extensive contracts that cannot just be ignored because their subsidiary went bankrupt.
vladx - Tuesday, May 23, 2017 - link
Memory is one of the most successful not the most, that's key there. But corporate politics is at work too of course, probably the biggest stockholders have a bigger personal investment in other areas of the company.bill.rookard - Tuesday, May 23, 2017 - link
It could be a bit tricky depending on just how profitable it is, and what the agreements are like with Western Digital. WD definitely has some rights here when it comes to this joint venture - it's their money and IP mixed in with Toshiba's, and they (Toshiba) can't just take their marbles and go home without some consideration going to WD.rahvin - Tuesday, May 23, 2017 - link
Yes Toshiba the company has a guaranteed delivery contract (the utility guaranteed to pay $X regardless of cost and if Toshiba brings it in under the make extra profit and if it comes in over they get stuck with the costs) on several nuclear reactors that are about 10 Billion over budget currently and by the time they are done it will cost Toshiba about $20 billion.That's why the decided to sell the whole division, they needed $20 billion yesterday or the entire company is insolvent.
meacupla - Wednesday, May 24, 2017 - link
I think it is because Toshiba's other divisions/subsidiaries don't have any market value, so selling those off wouldn't fix their money problems.Put another way, why would anyone buy the rotten parts?
Bullwinkle J Moose - Tuesday, May 23, 2017 - link
"I have 0% knowledge of Toshiba or business leading experience but am scratching my head that their solution is to sell off their best earning division?Are they that much in trouble?"
-------------------------------------------------------------------------------
Ummm.......Yeah
and mostly due to the scumbaggery of upper management
mostly
Finding out that the Foxconn and Broadcom bids were fake or rigged by Toshiba Management would not surprise me in the least
I'm sure there are a few more surprises in store before this sale goes through
Never bid above market value for a company like this one
NEVER!
edcoolio - Wednesday, May 24, 2017 - link
This is the only card they have left to play.Toshiba is now paying the price for sticking their toes into what seems like every single industrial sector possible. Their nuclear power division in the U.S. (Westinghouse Electric) is bleeding cash and they need money quick. Lots of it. Like billions.
The only division that can come up with that amount of scratch is the chip/NAND division.
I hope Micron gets it, but I'd be OK with SK Hynix winning out also. First, we shall see what becomes of this legal boondoggle.
Toshiba seems to be saying...
"I say we take off and nuke the entire site from orbit. It's the only way to be sure."
-Ellen Ripley
Lord of the Bored - Monday, May 29, 2017 - link
Man, I really hope a company with an actual nuclear power division isn't planning to go Ripley Protocol.Nexing - Thursday, May 25, 2017 - link
When WD bought their stake at Toshiba Nand's business, it was the Japanese company who led the way for the American who came late to this game.Now it looks like the later is throwing its heavy weight to block their helper's way out, in a hostile manner at a very inappropriate moment.
///Something reminiscent of other moves from big companies of the same origin.
zodiacfml - Friday, May 26, 2017 - link
Apple could have participated in this drama as they can save money in the long run while offering performance beyond a competitor could, such as Samsung.