SanDisk Corp.'s stock plummeted 5.09% during intraday trading on Wednesday, as the memory-chip maker experienced significant selling pressure.

The decline appears to be linked to news that Western Digital, which spun off SanDisk last year, is actively disposing of its remaining stake in the company. Western Digital announced it had entered into exchange agreements with institutional investors to receive nearly 1.9 million of its own shares in return for over 653,000 SanDisk shares. These exchanges are expected to settle soon, with Western Digital planning to dispose of its remaining 1.04 million SanDisk shares through similar mechanisms.

This move by a major shareholder to offload a substantial block of shares typically creates downward pressure on a stock's price, as it increases the available supply in the market. The selling comes despite SanDisk's remarkable performance since its separation from Western Digital, having recently surpassed a $200 billion market capitalization amid strong AI-driven demand for memory chips.