What: Shares of flash memory specialist SanDisk (UNKNOWN:SNDK.DL) got crushed today, down by 11% as of 2:36 p.m. ET, after the company received an analyst downgrade regarding the pending merger with Western Digital (NASDAQ:WDC).

So what: CLSA downgraded its rating on SanDisk by two notches, from "outperform" to "underperform," while reducing its price target from $86 to $70. Analyst Mark Heller expressed some skepticism about both Western Digital's fundamentals as well as whether or not the deal will actually close. Heller estimates that there is a 25% chance that the deal will not go through.

Now what: Western Digital had announced a deal with Unisplendour last year, and the SanDisk deal potentially puts the Unisplendour investment at risk. If Unisplendour walks away, there is some concern that Western Digital shareholders would not approve of the SanDisk acquisition due to difficult NAND market conditions. Ever since the deal was announced, SanDisk shares have traded at a significant discount to the $86.50 per share offer price, showing that investors have been skeptical all along -- and rightly so.