Seagate CEO, Bill Watkins, is navigating in troubled waters
Amid the hard disk drive glut, Seagate plans to announce a major restructuring early next year.
“We have to readjust our production capacity to meet the lower demand,” said Bill Watkins, Seagate CEO at a media dinner last night.
The hard disk drive market is finally consolidating
Seagate is obviously not alone in the hard drive industry having to readjust drastically its expectations. Yesterday, Fujitsu’s CFO revealed that the Japanese company money-losing hard drive business is now up for sale; with Western Digital and Lenovo potential buyers.
Watkins also pointed to the “absurd” valuation of companies in the storage sector that will undeniably spur mergers and acquisitions or even “take-private” deals.
Seagate market value is around $2.5 billion despite having $1.1 billion in cash and short term investments!
“For the first time since Seagate went public, I bought some shares!,” admitted Watkins who said he never sold any of his Seagate shares either.
Private equity firm Silver Lake Partners took Seagate private 8-years ago before letting it go public 2-years later. “The market is not ready for a debt-based buyout. But we’re looking at other alternatives,” speculated Watkins.
It would be only the second time in 10-years that Seagate will be a private company. Déjà vu anyone?
[...] —hole in the meeting and they gave him the dog head award." In addition to his comments at CES, Watkins had been telegraphing a major restructuring since December – not a great idea with respect to morale and productivity. Last Word Personally, I [...]