Veritas Plunges 40% After Seagate Deal

Shares of Veritas Software Corp. plunged 40% as investors frowned on the software maker’s purchase of a unit of Seagate Technology Inc. for about $1.6 billion in stock. Veritas shares fell $19.19 to close at $26.19 in heavy trading on Nasdaq amid worries that the Mountain View-based company was overpaying for the unit and that it may have opened the door to its own acquisition by Seagate. This week Veritas, a maker of software to protect stored data, agreed to acquire the Network and Storage Management Group of Seagate Software. Analysts said Veritas expected to take a $500-million charge on the deal and would write off an additional $1 billion over the next three to five years. Several analysts said, however, that the deal would bolster Veritas’ bottom line and make it the leader in its sector. Scotts Valley-based Seagate Technology shares were unchanged at $23 on the NYSE.