Greenlight Capital’s position in Toshiba drive up its stock price

As per the U.S. hedge fund, Toshiba’s shares have the potential to touch 400 yen once it manages to overcome its legal battle with Western Digital Corp.

In a significant development, U.S. hedge fund Greenlight Capital has disclosed, it has taken a position in Toshiba following Western Digital Corp’s failure to gain an immediate injunction to block the $18 billion sale of Toshiba’s chip unit.

Earlier last week, the hedge fund had stated that Toshiba’s shares may rise as high as 400 yen per share once it manages to resolve a legal battle with Western Digital over the sale of its chip business.

With the hedge fund taking up this position, Toshiba’s shares surged by 6.6% in Tuesday morning trade to rest at 246.8 yen.

On Monday, the Tokyo stock exchange was closed because of a national holiday.

In mid-June, Toshiba’s memory chip joint-venture partner Western Digital had sued Toshiba in a U.S. court arguing that Toshiba needs its consent to sell the business.

On Friday at the hearing, Judge Harold Kahn postponed the decision on granting an injunction of the proposed sale and instead ruled that Toshiba will have to give Western Digital two weeks notice before closing the sale.

Toshiba needs to sell the chip unit in order to cover the cost of its now bankrupt Westinghouse’s nuclear unit in the U.S.

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