Western Suits Dismissed

Western Digital Corp. said a U.S. District Court dismissed eight lawsuits alleging that the Irvine computer disk-drive maker misled shareholders about the business prospects for outdated hard drives, inflating the price of the company’s shares last year.

U.S. District Court Judge Stephen Wilson “found there was no factual basis for the speculative allegations” made in the suit, the company said.

The class-action suits, filed between Dec. 2 and Feb. 24 and consolidated into one, claimed that the company didn’t disclose how the disk-drive industry’s shift to new technology would affect the price that Western Digital could get for its old hard drives.

In December, Western Digital warned it would take a charge of as much as $95 million, three times larger than expected, in its fiscal second quarter because of steep spending on new technologies and price-cutting on hard-disk drives used in personal computers.

The company, which told investors twice in the preceding four months that the shift to different technology would hurt its profits, said it would break even before the second-quarter charge. When it announced the charge on Dec. 2, Western Digital stock fell 64% to $19.38 a share. It had hit a record high of $54 on Aug. 20, 1997. The stock closed Monday at $21.69, down 13 cents a share, on the New York Stock Exchange.