SanDisk Corp.'s stock experienced a significant pre-market plunge of 5.01% on Wednesday.

The sharp decline followed an announcement that Western Digital, SanDisk's former parent company, plans to sell approximately 5.8 million shares of SanDisk common stock in a secondary offering valued at around $3.1 billion. The shares are being offered at $545 each, representing a discount of about 7.7% to SanDisk's previous closing price.

Analysts note that this move was anticipated, as Western Digital had until February 21 to divest its remaining SanDisk shares without incurring tax consequences. The transaction involves a debt-for-equity exchange with affiliates of J.P. Morgan and Bank of America, and is part of Western Digital's strategy to reduce debt and focus on its core hard disk drive business.