What is the significance of the mandatory conversion event?

The mandatory conversion signifies that Western Digital has converted all of its Series A Convertible Perpetual Preferred Stock into its Common Stock. This action is a pre-planned event based on the terms set when the preferred stock was issued and means the preferred stock no longer exists, and the number of outstanding common shares has increased.

Why did the mandatory conversion occur?

The conversion occurred because the conditions stipulated in the Certificate of Designations for the Series A Preferred Stock were met. Specifically, the closing price of WDC's Common Stock exceeded 150% of the conversion price for a specified period, allowing the company to exercise its option for a mandatory conversion.

What is the impact of this conversion on existing shareholders?

Existing common shareholders will see an increase in the total number of outstanding common shares. Holders of the preferred stock have had their shares automatically converted into common stock at the pre-determined conversion rate. The dilutive effect on existing common shareholders is as anticipated when the preferred stock was initially issued.

When was the preferred stock originally issued, and what were the terms for this conversion?

The Series A Convertible Perpetual Preferred Stock was issued in connection with a private placement that closed on January 31, 2023. The Certificate of Designations allowed the company to mandate conversion after the three-year anniversary of the closing date, provided certain stock price performance hurdles were met.

WDC 8-K: Shareholder Matters

Summary

Western Digital Corporation (WDC) has announced the mandatory conversion of all outstanding shares of its Series A Convertible Perpetual Preferred Stock into shares of its Common Stock. This conversion was triggered on February 17, 2026, as per the terms outlined in the Certificate of Designations for the Preferred Stock, following the satisfaction of specific trading price conditions for the Common Stock. This event marks a significant shift in the Company's capital structure, effectively eliminating the preferred stock class and increasing the number of outstanding common shares. Investors should note that this conversion was pre-determined by the terms agreed upon at the time the preferred stock was issued in January 2023. The conditions for this mandatory conversion, specifically that the Common Stock's closing price exceeded 150% of the conversion price for at least 20 trading days within a 30-day period, have now been met.

Key Highlights

1WDC executed a mandatory conversion of all Series A Convertible Perpetual Preferred Stock into Common Stock on February 17, 2026.
2The conversion was exercised in accordance with the terms of the Preferred Stock's Certificate of Designations.
3The mandatory conversion was triggered by specific trading price conditions of WDC's Common Stock being met.
4This action eliminates the outstanding preferred stock from the Company's capital structure.
5The conversion increases the total number of outstanding Common Stock shares.
6The terms for this conversion were established at the time of the preferred stock issuance in January 2023.

WESTERN DIGITAL CORP 8-K Report, Rights Modification (Feb 18, 2026)

Summary

Key Highlights

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