Sandisk Stock Split: 8-for-1 Effective 19 November,…

Sandisk announced an eight-for-one forward stock split alongside its fiscal first-quarter results on 29 October, with shares distributed after the close on 19 November and split-adjusted trading expected from the open on 20 November. Sandisk said holders of record at the close of business on 9 November receive seven additional shares for each share held.

The company stated its reason for the move in the earnings release itself. The Sandisk stock split is intended “to make the stock more accessible, including to employees” through its employee stock purchase plan. SNDK closed Thursday at $1,330.05, down 5.32%, and fell a further 7.67% to $1,228.05 at Friday’s open.

The Sandisk Stock Split Timetable Runs From 9 November to 20 November

Three dates matter to anyone holding the stock between now and late November. Sandisk said the record date is the close of business on 9 November, which fixes who is entitled to the extra shares. The additional shares are issued after the market closes on Thursday 19 November, which is the effective date. Trading on a split-adjusted basis is expected to begin at the open on Friday 20 November, which is when screens catch up with the Sandisk stock split.

A shareholder does not need to take any action across those three dates. Brokers credit the Sandisk stock split shares automatically, and anyone buying between 9 and 19 November will generally still end up with the split-adjusted position, because the shares trade with an entitlement attached until the adjustment happens.

A $12,280 Holding Is Still $12,280 After the Sandisk Stock Split

Sandisk states plainly in the release that market capitalization and stockholder ownership percentages are unaffected. A holder of 10 shares at $1,228.05 holds $12,280.50. After the split that is 80 shares at roughly $153.51, which is the same $12,280.50.

What does change is every single per-share figure anyone has built into a model. Diluted share count goes from about 151 million to roughly 1.21 billion. Earnings per share, book value per share and any price target quoted before the Sandisk stock split all divide by eight. The average analyst target circulating before the split was quoted on a pre-split basis, so it needs the same treatment before it means anything on a post-November screen.

Investor Takeaway

Sandisk Says the Split Is About Access, Including for Its Own Employees

Accessibility is the company’s stated rationale, and the share price goes a long way to explaining it. SNDK is up 400.54% this year and 536.95% over twelve months, a run that has carried a string of price-target revisions with it, and took the stock to $1,404.77 at Wednesday’s close before the results. At that level a single share costs more than many staff would put into an employee purchase plan in a cycle, which is the specific problem the release names.

The quarter underneath the Sandisk stock split is the reason the price got there. Revenue reached $11.03 billion, up 23% sequentially and 378% on the year, ahead of consensus, with non-GAAP gross margin at 85.1%. Datacenter revenue was $4.80 billion, up 61% sequentially, against edge at $5.83 billion and consumer at $397 million. Sandisk bought back about 3.2 million shares for $5.0 billion in the quarter, and generated $6.36 billion of operating cash flow, figures that landed the day after Western Digital reported.

The Guidance Is Pre-Split, So the $55 to $57 Becomes About $6.88 to $7.13

Sandisk guided fiscal second-quarter revenue to $12.2 billion to $12.6 billion with non-GAAP earnings of $55.00 to $57.00 a share, and the release says explicitly that all per-share figures are pre-split. Divide that range by eight and the post-split equivalent is roughly $6.88 to $7.13. That division is ours rather than a company figure, and Sandisk has not published a restated guide.

The share price reaction has not followed the beat, at least so far. SNDK fell 5.32% on Thursday and another 7.67% at Friday’s open, leaving it down 29.29% over a month even after the results, with a beta of 3.29. Market value is down to $176.61 billion. The memory complex has been selling off around it, with Western Digital’s own beat failing to stop an 8.5% sector drop earlier in the month.

Investor Takeaway