Latest news with #RobertFeurle
Business Insider
22-05-2025
- Business
- Business Insider
Wolfspeed Stock Collapses: Here's What J.P. Morgan Says About the Road to Bankruptcy
Wolfspeed (NYSE:WOLF) investors faced a harsh reality on Wednesday as the company's stock plummeted nearly 70%. This collapse followed reports that the silicon carbide chipmaker is preparing to file for Chapter 11 bankruptcy within weeks. Confident Investing Starts Here: Earlier this month, Wolfspeed said that it was exploring options to either restructure its debt or pursue bankruptcy. The company carries $6.5 billion in debt and had $1.3 billion in cash as of March 31. Wolfspeed has been struggling with weak demand in the industrial and automotive sectors, along with uncertainty caused by tariffs. The company was awarded $750 million in direct funding through the CHIPS Act. However, it has yet to receive the funds, and speculation emerged in March that it may have lost access to the anticipated cash infusion. Also in March, Wolfspeed announced it would lay off around 180 employees, mainly from its materials operations in Durham and Siler City and the company named Robert Feurle as its new CEO, effective May 1. That has done little to change its fortunes, it seems. Given the challenges faced by the company, the news probably won't come as much of a surprise to J.P. Morgan's Samik Chatterjee, an analyst who ranks amongst the top 4% of Wall Street stock pros. 'In our view, further evidence of demand headwinds amid an uncertain macro (e.g., auto-related tariffs, risks to CHIPS Act funding, risks to EV policies, etc.), higher competition, and significant changes in the management team creates a challenging path for the company to achieve its target of generating positive operating cash flow in FY26 (Jun-end),' Chatterjee explained. 'Even though the management team has already taken incremental actions to reduce its prior EBITDA breakeven point given the current status of demand (e.g., $800 mn vs. prior of <$1 billion), we believe the above outlined headwinds are setting the stage for lower confidence in its stated outlook for breakeven and greater challenges in relation to convincing equity investors that there remains a path to profitability,' the 5-star analyst added. It's no wonder, then, that Chatterjee rates WOLF shares as Underweight (i.e., Sell). (To watch Chatterjee's track record, click here) Other Street analysts will likely soon be joining Chatterjee in the bear camp. In the meantime, the stock claims a Hold (i.e., Neutral) consensus rating based on a mix of 3 Buys, 2 Holds and 4 Sells. (See WOLF stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Yahoo
07-04-2025
- Automotive
- Yahoo
Why Wolfspeed Plummeted 47% in March
Shares of silicon carbide chipmaker Wolfspeed (NYSE: WOLF) plunged 47.1% in March, according to data from S&P Global Market Intelligence. Wolfspeed is in a tough spot in an already-adverse environment. The company has spent billions of dollars building up domestic silicon carbide plants in the U.S., and taking on significant debt to do so. But not only have its key automotive and industrial end markets fallen into a big downturn, but the current tariff uncertainty threatens to harm auto demand even further. That's not a great recipe, and several company-specific events in March added to the risks surrounding the company. Wolfspeed had a tough month on several fronts. On March 6, Wolfspeed announced it would lay off another 180 people as part of cost-saving efforts, and that it would also aim to lower its planned capital expenditures by $150 million to $200 million in the next year, its fiscal 2026, with another $30 million to $50 million of cuts in fiscal 2027. Wolfspeed's stock actually rallied a little bit on the news, as management reiterated its near-term outlook and said it aimed to be free cash flow positive by 2027 as a result of these actions. Later, on March 27, Wolfspeed announced it was appointing Robert Feurle as CEO, replacing interim CEO Thomas Werner, who took over last fall, after Wolfspeed's prior CEO stepped down. But it was unclear what effect that announcement might have had on the stock, as the very next day, Wolfspeed's stock plunged nearly in half, accounting for pretty much the entire month's losses, because of a different matter. That morning, rumors began circulating that the company would not receive the $750 million in CHIPS Act funding that the government had agreed to pay Wolfspeed during the prior administration. As a reminder, the CHIPS Act was passed on a bipartisan basis under the Biden administration, but President Trump has gone on the record saying that he doesn't like the act's subsidies. Not all of the CHIPS money has been disbursed yet, including Wolfspeed's subsidy. Wolfspeed could certainly use the cash infusion, given that it has about $6.4 billion in debt against $1.4 billion in cash, and that it has burned through $1.15 billion in cash in just the past six months alone. Wolfspeed has high debt, its key end market of electric vehicles has slowed mightily, and now tariffs threaten demand for autos and industrial investments in general. That's not a great combination. The only silver lining is that Wolfspeed is attempting to build a lot of manufacturing capacity in the United States. That appears to align with the administration's goals. While it hasn't been confirmed that Wolfspeed isn't getting its subsidy, it's very unclear if it will, and the magnitude of the March 28 sell-off seems to indicate someone may know that it won't. While semiconductor tariffs could boost demand for Wolfspeed's domestically made silicon carbide wafers and chips, there also needs to be stronger end demand for that to occur. The history of the effect of tariffs on demand is not encouraging on that front. Moreover, Wolfspeed could restructure or declare bankruptcy at some point and still maintain operations. If that were to occur, debt holders could take over and continue operations, or sell the assets to others. That would still maintain Wolfspeed's domestic production, but current equity holders would probably get zero in that scenario. With so many stocks down by a lot, there are significantly better risk-reward situations out there to buy. Investors should steer clear. Before you buy stock in Wolfspeed, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Wolfspeed wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $461,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $578,035!* Now, it's worth noting Stock Advisor's total average return is 730% — a market-crushing outperformance compared to 147% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 5, 2025 Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Wolfspeed. The Motley Fool has a disclosure policy. Why Wolfspeed Plummeted 47% in March was originally published by The Motley Fool
Yahoo
04-04-2025
- Business
- Yahoo
Wolfspeed (NYSE:WOLF) Sees 49% Plummet In Last Month As New CEO Prepares To Take Helm
Wolfspeed recently reaffirmed its earnings guidance for Q3 2025 with projections indicating significant net losses, set against the backdrop of major leadership changes as Robert Feurle prepares to assume the roles of CEO and Board Member by May. Despite these developments, the company's stock plummeted 49% over the last month. This steep decline aligns with a broader market downturn exacerbated by intensified trade tensions and widespread sell-offs in the semiconductor sector, which was hit particularly hard as major indices like the Nasdaq Composite entered bear market territory amid these economic stresses. Every company has risks, and we've spotted 3 risks for Wolfspeed you should know about. This technology could replace computers: discover the 21 stocks are working to make quantum computing a reality. Over the last year, Wolfspeed's total return was a decline of very large magnitude, approximately 90%. This underperformance contrasts sharply with the broader US market, which managed a modest gain of 3.3%. Several key events have shaped this downturn. Wolfspeed's Q2 FY2025 earnings report, released in January 2025, revealed a significant increase in net losses to US$372.2 million, contributing to investor concerns. Additionally, a class-action lawsuit filed in November 2024 alleged securities violations, potentially impacting investor confidence. Furthermore, operational costs were poised to rise following an October 2024 debt financing move to secure US$750 million for facility expansions. Another factor was the dilutive effect of a January 2025 equity offering that raised US$200 million. While revenue forecasts remain high, these recent challenges, combined with industry competition, may have driven shareholder returns lower than both the market and industry averages over this period. Gain insights into Wolfspeed's past trends and performance with our report on the company's historical track record. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:WOLF. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Yahoo
28-03-2025
- Business
- Yahoo
Why Wolfspeed Stock Imploded on Friday
Friday is looking like a lousy day to own stock in Wolfspeed (NYSE: WOLF) -- and nobody seems to know why. Thursday evening, the maker of silicon carbide semiconductor chips for power transfer announced it has chosen chip industry veteran Robert Feurle, who previously worked at companies such as Micron Technology, Infineon Technologies, and most recently ams OSRAM, to become its new CEO, replacing interim Executive Chairman Thomas Werner (who will continue in his role as chairman of the board). The company had no other news of note -- yet as of 10:30 a.m. ET, Wolfspeed stock is down a dramatic 49.5%. Can Feurle really be so unpopular that simply giving him the CEO's job is enough to cut Wolfspeed's stock price in half? It seems unlikely. Also, as already noted, Wolfspeed isn't suddenly tossing Werner overboard for some just-discovered malfeasance. He's actually remaining in the company's top job. And the transition in leadership isn't even happening in a rush; it doesn't take effect until May 1. All things considered, this actually seems like a well-planned transition, four months after the company's last official CEO, Gregg Lowe, was ousted from his post. And Feurle even said all the right things as he accepted the new job: "With all of the company's competitive advantages I feel very confident that we will be able to work through this transformative period to refresh the operating plan, improve financial performance and accelerate our path to positive free cash flow." All this being said, one must point out that Feurle's new job won't be a cakewalk. He's taking over a company worth less than $850 million in market cap, but with $6.6 billion in debt. A company that lost more than its own market cap last year, that's burning through $1.3 billion a year, and that only has $1.4 billion cash in the bank. Maybe, just maybe, what investors aren't upset about today isn't its choice of new CEO. Maybe they're upset with Wolfspeed stock itself. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $288,966!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,440!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $526,737!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 24, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Wolfspeed. The Motley Fool has a disclosure policy. Why Wolfspeed Stock Imploded on Friday was originally published by The Motley Fool Sign in to access your portfolio
Reuters
28-03-2025
- Business
- Reuters
Chipmaker Wolfspeed's shares plunge over 45% to 27-year low
March 28 (Reuters) - Wolfspeed's (WOLF.N), opens new tab shares slumped about 48% on Friday, hitting their lowest since 1998, a day after the chipmaker appointed a new CEO amid its struggles to improve its financial position. The company on Thursday named chip industry veteran Robert Feurle as its chief executive effective May 1, after it ousted top boss Gregg Lowe without cause in November. Wolfspeed has been grappling with a slowdown in demand from automotive customers, which has crimped its profitability. In November, the company said it closed a 50mm device fabrication plant in Durham, North Carolina and was planning to lay off 20% of its employees. Meanwhile, Wolfspeed is also waiting on about $750 million in federal funding under the U.S. CHIPS Act, the landmark 2022 bipartisan law which promised $52.7 billion in subsidies for domestic semiconductor chips manufacturing and production. However, earlier this month, President Donald Trump said U.S. lawmakers should get rid of the law and use the proceeds to pay debt. "Wolfspeed's CHIPS Act grant ended up being the highest-dollar CHIPS grant to not be officially awarded before Biden's exit, leaving it particularly vulnerable to being pulled under the new administration," said Brooks Idlet, senior analyst at CFRA Research. Not receiving the grant "would be devastating for Wolfspeed, likely necessitating a substantial restructuring in order to preserve cash," Idlet said. The CHIPS Act is critical for Wolfspeed as it provides essential funding to accelerate its silicon carbide semiconductor manufacturing expansion. Shares of Wolfspeed were last trading at $2.81. Including the session's losses so far, the stock has lost more than 59% of its value this year. According to estimates by Ortex, about 32.5% of Wolfspeed's free float was in short position as of March 27. A higher short interest indicates that the market expects the stock price to decline.
