Seagate Shares Jump 6% After $175M Huawei Settlement, $105M Reserving
STX•Seagate agreed to pay $175 million to settle shareholder claims over undisclosed 7.4 million hard drive sales to Huawei, setting aside $105 million while insurers cover $70 million. Shares rose over 6% in afternoon trading as the deal, which follows a $300 million 2023 export-control penalty, awaits judicial approval.
1. Settlement Details
Seagate has agreed to a $175 million settlement to resolve a class-action lawsuit alleging the company concealed sales of over 7.4 million hard disk drives to Huawei between September 2020 and April 2023. The company denies any wrongdoing and the agreement still requires approval from a federal judge in San Francisco before it becomes binding.
2. Financial Provisions
To cover the settlement, Seagate has earmarked $105 million from its balance sheet, with insurers expected to cover the remaining $70 million. This follows a separate $300 million penalty paid in 2023 related to U.S. export-control violations.
3. Market Reaction and Outlook
Shares of Seagate climbed more than 6% on the day of the announcement as investors reacted positively to the resolution of long-running litigation. The stock’s performance will hinge on the timing of judicial approval and any potential legal fee requests of up to 25% of the settlement fund.
