Xyratex Ltd (fka XRTX)

[grawsha]

Western Digital Deal Boosts Data Storage Stocks
he tickerspy.com Staff, On Monday March 7, 2011, 12:30 pm EST
Shares of Western Digital (NYSE: WDC - News) are soaring 14% after the hard-drive manufacturer said it will acquire Hitachi's hard drive unit for $4.3 billion in cash and stock. The news is proving to be a boon for the Data Storage Stocks Index, which is up 1% today. The Index has lost 6% in the past month.

Seagate Technology (NASDAQ: STX - News), Western Digital's chief rival in the hard-drive space, is also getting a lift on the news to trade higher by 10%. BMO Capital said in a note to clients that the deal is good for Seagate, although the firm had expected Seagate would be the buyer for the Hitachi business, Barron's reported. Barron's also noted that there had been talk of Hitachi conducting an IPO for the hard-drive business.

While shares of Xyratex (NASDAQ: XRTX - News) are down 1%, BMO said that company could also be a potential winner due to the Western Digital/Hitachi deal because Xyratex counts both companies among its customers. Capstone Investments reiterated "hold" ratings on both Seagate and Western Digital.

Other hard-drive makers such as Quantum Corp (NYSE: QTM - News) and STEC Inc. (NASDAQ: STEC - News) are trading lower, but both opened higher following the Western Digital news.

OCZ Technology Group Inc. (NASDAQ: OCZ - News) is another winner in the hard-drive space, surging 12% after issuing fourth-quarter revenue guidance of $64 million compared to the consensus estimate of $53.36 million.

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http://finance.yahoo.com/news/Western-Digital-Deal-Boosts-indie-3278447258.html?x=0&.v=1