Even that retort to the Backblaze report is flawed (misunderstood drive specs and math), but it doesn't really matter. There are several facts about the report that cannot be confused:
1. The worst performing STX drives are the oldest and all have long been discontinued. And that 1.5TB drive with the worst stats was a member of the 500GB drive family that did in fact cause STX to incur additional warranty expenses to resolve. It was a well known and widely reported issue. Nothing like digging into the dumpster. What idiot continued to rely upon those drives?
2. They are using consumer-grade drives in enterprise-grade 24/7 RAID environments. There is a reason that enterprise drives have workload ratings 10 times greater than consumer drives. This is a major misuse of a drive. They should have all their warranties invalidated (WDC will do that).
3. It does not matter if Hitachi (or WDC) consumer drives perform better that STX consumer drives in non-spec enterprise environments. It is a misapplication of the drives in all cases. Maybe the design difference between consumer-grade and enterprise-grade is greater in STX drives than HIT drives (I don't know). When used under appropriate operating conditions, I suspect you will find little differences (Hey - that's my anecdotal evidence). Do you normally buy HDDs (or any product) for it's operational performance OUTSIDE it's design parameters?
4. That some dweeb wrote a SA article and used the Backblaze report as a justification for his conclusions - when he clearly had NO IDEA what the report was based upon - just further illustrates how disinformation is propagated on the internet, possibly for illicit purposes.
Hello chi ...
The total amount accrued by WDC is $732Mill through 12-27-13. I know the oral arguments were made last week, so a decision must be forthcoming soon (in court time). I don't know about a one time divvy or whether they'll throw it into the buyback (or redemption, whatever they call it). I've long given up trying to figure out the financial wizardry they use at Seagate.
But I have to admit - they are good at doing it. I was wondering how they were going to pay for the 32.7Mill shares they bought back from Samsung. So they buy 32.7 Mill shares at $46.03/shr. They are paying a dividend of $0.43/shr - which works out to a 3.74% cost of divvy. To buy those shares, they issue $800Mill in 3.75% debt (and sold off some short-term investments probably yielding under 1%). So their continuing cost to either purchase those shares or pay the divvy is a wash. Of course, if they increase the divvy in the future, the carrying cost favors the buyback.
There is a major flaw in the report referenced ... and in the use of the drives reported in the story:
"The firm has posted details on failure rates for 15 different consumer-grade hard drives, and the numbers don't look good for Seagate."
The source of the report was using consumer-grade HDDs in 24/7 RAID arrays. Consumer-grade drives are specifically NOT designed for that type use. In fact, in can invalidate the warranty.
This is true of ALL HDDs and SSDs: use RAID qualified drives for RAID environments. There is reason they cost for either type.
"If they do nothing, then it gives STX a competitive advantage."
Not necessarily. There are alternative suppliers for the XRTX HDD test/manufacturing equipment. If WDC really wanted to "stick" it to STX, they could buy HTCH for less than XRTX.
"Based on historical superior management skills(WDC), I think you're saying this time they might not be smarter than us?"
Just the opposite (and only you would be so presumptuous to think you know WDC's business better than WDC). I think WDC knows exactly where things are headed.
"Lets face it, its time for the HDD to SSD transition, that could really hurt STX/WDC ST!"
Yet, HTCH seems to be indicating a strong pickup in mobile (maybe that was specific to them ... we'll see). The transition is not about SSD vs HDD ... it's about the type of device accessing the data and where the data is located. As such, SSD will not supplant HDD is gross volume storage for a long time .. still.
Doesn't matter what you or I think it's worth ... we are not in a position to outbid STX. Certainly, WDC could ... if they thought XRTX was worth more than what STX is paying and it was in their best interests.
Of course, WDC is smarter than all of us combined. So if they do nothing, what does that say about your thesis?
Not that I have a dog in this fight (well, I sort of do) ....
"It's obvious their intentions were to make money, so did they just get lucky, or is their motivation money?"
BS's motivation is the same as yours ... to make money. How much they make in a given period of time must be balanced by the risk incurred. Maybe their time horizon vs risk was not the same as yours (waiting till 2016)? The only difference between what you wanted and what they wanted is dollars. You always wanted STX to buy XTRX ... so you got your wish. (A valuable lesson to learn ... be careful what you wish for). You just didn't get the dollars you wanted. You were willing to take more risk than BS. But then, I'll bet you had far less of your net worth tied to one company.