Wolfspeed weakness continues, shares remain down 47%

Shares of Wolfspeed (WOLF) have fallen $2.51, or 47%, to $2.88 in early morning trading. Yesterday, Wolfspeed announced the appointment of Robert Feurle as CEO, effective May 1. Feurle most recently served as executive VP and GM of the Opto Semiconductors Business Unit at ams-OSRAM AG. Along with the company’s earnings at the end of January, Wolfspeed said it is incurring “significant factory start-up costs relating to facilities the company is constructing or expanding that have not yet started revenue generating production.” Wolfspeed Executive Chair, Thomas Werner, added at that time: “Since stepping into the Executive Chairman role in November, I have been acutely focused on aggressively pursuing our plans to achieve our financial and operational targets. Myself, the Board, and the management team have aligned on an operating plan driven by three key immediate priorities designed to put us on a path toward long-term growth and profitability: improving the financial performance of the company to accelerate the path to operating free cash flow generation, taking aggressive steps to strengthen our balance sheet, and raising cost-effective capital to support our growth plan. We have already made significant progress on these initiatives, evidenced by our completion of our $200M at-the-market equity offering which puts us one step closer to finalizing our CHIPS funding.” On October 15, 2024, the U.S. Department of Commerce and Wolfspeed announced they had signed a non-binding preliminary memorandum of terms for up to $750M in proposed direct funding under the CHIPS and Science Act.