Western Digital and Kioxia merger talks heat up, SEC investigates Deutsche Bank’s DWS, Lordstown’s names new CEO

Yahoo Finance's Julie Hyman breaks down Thursday’s business headlines.

Video transcript

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JULIE HYMAN: Western Digital is in advanced talks to buy Kioxia-- which is a privately held Japanese memory chip maker-- more than $20 billion. That's according to the "Wall Street Journal."

The two companies have had long running discussions that have recently heated up. And Kioxia might still opt for an IPO instead or another deal. The acquisition could face regulatory hurdles not just in Japan and the US but in China as well.

Shares of Deutsche Bank's asset management arm DWS have been plunging in German trading today. That's after the "Wall Street Journal" reported it's under investigation by the SEC and federal prosecutors. The company's former head of sustainability said it overstated how much it used ESG criteria to manage its assets.

DWS said in a 2020 annual report that more than half of its $900 billion under management was invested using ESG criteria. That's an assessment contradicted by both an internal review and that former sustainability chief.

And Lordstown Motors has a new CEO. Daniel Ninivaggi is former CEO of Icahn Enterprises as well as a former executive at Lear and Federal-Mogul. Both of those are automotive parts and systems suppliers.

Lordstown has warned that it's running out of cash. It's under investigation by both the SEC and the DOJ over whether its former CEO inflated orders. But Miles, it looks like investors like this new CEO news. They're bidding up the stock by 27%.

- Good luck, it can't be worse. I-- I mean, like, I suppose it could be worse. But it's-- it's hard to imagine a scenario in which the new management team does a worse job than the previous management team. So there you go.

JULIE HYMAN: Well, and this-- and this guy, you know, has a pretty deep, deep level of expertise and experience in-- and actual execution, it seems-- it seems like, of making car parts.

- It seems like. I mean, you know, again, the bar-- it's not about the incoming management team. Which I'm sure is, you know, a fine group of individuals. It's just about-- we just talked about hurdles of buybacks, right.

All you've got to do is clear the Steve Burns hurdle. All you need to do is, don't come on Yahoo Finance and say you have 100,000 orders when you have zero orders. Just don't do that. Just [LAUGHS] don't do that. Don't talk to Brian Sozzi, I guess. Maybe that's-- maybe that's the last.

BRIAN SOZZI: Maybe they'll be buying back stocks soon. Maybe they'll-- they'll be buying back stocks and [INAUDIBLE].

[LAUGHTER]

- Well, Sozzi, if they come in and--

JULIE HYMAN: Their stock is cheap. [LAUGHS]

- They can come in, borrow money, do a huge buyback. And then get that thing back above the $10 SPAC level. And then-- um, and then go from there. But anyway--