The news at SanDisk wasn’t good this week.  SanDisk released its Q3 earnings and posted a huge $250 million operating loss. 

This caused the company to announce that as part of its efforts to reduce operating expenses, "actions will be implemented in the current quarter" to include "canceling or exiting a number of products and marketing activities, and will result in employee reduction in R&D, Sales & Marketing, G&A, and Operations."

SanDisk’s CFO, Judy Bruner, also indicated there is more restructuring ahead. When asked about the operating expenditures, she responded, "We're taking actions that we believe are quite aggressive and will cause us to make some pretty tough choices in the business. We have not finalized yet our restructuring actions."

And the news got worse: Samsung, which had announced its offer to purchase SanDisk for $5.8 billion, or $26 per share, withdrew its offer publicly on Tuesday in a letter it sent to SanDisk and then published it online. The letter cited SanDisk’s financial results as too uncertain to justify the ongoing offer.

A portion of the letter reads, “Your recently announced third quarter results serve only to illustrate this risk.  Your surprise announcements of a quarter billion dollar operating loss, a hurried renegotiation of your relationship with Toshiba and major job losses across your organization all point to a considerable increase in your risk profile and a material deterioration in value, both on a stand-alone basis as well as to Samsung.  As a result of these developments, we are no longer interested in acquiring SanDisk at $26/share.”

Whether this means that Samsung has completely abandoned its intent to purchase SanDisk or whether it intends to make another lower offer remains to be seen.  SanDisk shares were down 32 percent in trading to one of their lowest levels in years.