NEW YORK, Aug. 24 -- Eleven days ago SanDisk sat investors down and told them what a flash memory company can be worth. From fiscal 2028 through fiscal 2030, it said, expect gross margins of around 80 per cent, operating margins of around 75 per cent, and roughly half of revenue converting to free cash flow. Operating expenses would run at about 5 per cent of sales. Whatever was left after reinvestment would go back to shareholders in full.

On Monday the market took 6.9 per cent off the stock.

SanDisk traded at $1,486.41 shortly after noon in New York, and it was not alone. Micron fell 5.7 per cent, Seagate 5.6 per cent, Western Digital 5.5 per cent. Every large American storage name moved together and moved down, which is the signature...