Badwill
It wasn't a great day for the storage industry yesterday, as both hard drive maker Seagate and flash storage specialist Sandisk both announced big write-offs from their balance sheets.
In an SEC filing, Seagate announced it was taking a goodwill impairment charge of approximately $2.3 billion, "of which approximately $2.2 billion is related to the goodwill the Company recorded in connection with its May 2006 acquisition of Maxtor Corporation."
When the Maxtor acquisition was first announced in late 2005 it was valued at $1.9 billion, so the write-down is in excess of the value of the acquisition.
Goodwill in a non accounting sense is thin on the ground for Seagate too as the saga over firmware updates for some of its products is still rumbling on. We've yet to receive news of any definitive conclusion of the matter from Seagate.
Meanwhile Sandisk has announced its Q4 results. While revenues of $863.9 million beat expectations, Sandisk had to take $1.91 billion of charges for the fourth quarter, which included over a billion dollars "due to a sustained decline in SanDisk's market capitalization, among other factors."
