Investor Jitters a Factor in Failed Seagate Deal

A few years ago, former Seagate Technology PLC Chief Executive Bill Watkins made an analogy comparing the hard-disk industry to Rodney Dangerfield.

“I think it’s unfair not to respect a commodity,” Watkins told Newsweek in 2007. “There’s a tremendous amount of technology in this commodity.”

Yet for the most part, investors have given the hard-drive business, with its razor-thin profit margins, short shrift. A valuation debate, plus a nagging fear about the potential obsolescence of hard disks, may have been the two biggest factors in Seagate’s failure to reach a deal to go private.

Most analysts, however, believe that the deal collapsed purely over price.

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