Wolfspeed raises $200M through stock offering

DURHAM, N.C. - Wolfspeed, Inc. (NYSE: NYSE:WOLF), a leader in silicon carbide technologies, has successfully completed an at-the-market stock offering program, raising gross proceeds of approximately $200 million. This move is part of the company's strategy to strengthen its balance sheet and improve its capital structure. According to InvestingPro data, the company carries a total debt of $6.3 billion, making this capital raise particularly crucial. While the company maintains a healthy current ratio of 3.14, indicating strong short-term liquidity, InvestingPro's Fair Value analysis suggests the stock is currently undervalued.

The company sold 27,793,535 shares of common stock as per the shelf registration statement filed with the U.S. Securities and Exchange Commission and the prospectus supplement dated December 9, 2024. The net proceeds are intended to reduce leverage and address outstanding maturities. The timing is significant as the stock has experienced substantial volatility, with InvestingPro data showing an 85.8% decline over the past year and currently trading near its 52-week low of $4.66. InvestingPro subscribers have access to 15 additional key insights about Wolfspeed's financial health and market position through the platform's comprehensive Pro Research Report.

Tom Werner, Executive Chairman of Wolfspeed, stated that completing the CHIPS Act funding process was a priority, and the completion of the ATM Program is a significant step towards receiving funding disbursements from the CHIPS office and other lenders.

Wolfspeed's focus on powering innovations through silicon carbide technology aims to drive the transition from silicon to silicon carbide with American innovation and intellectual property.

The press release also contains forward-looking statements which involve known and unknown risks and uncertainties that could cause actual results to differ from those projected. These include global economic and geopolitical conditions, such as the military conflict between Russia and Ukraine and Middle East conflicts, and potential impacts on product demand due to economic slowdowns or recessions.

Wolfspeed's expansion plans also carry risks, including delays and cost overruns in construction, the timing and amount of government incentives received, and challenges in ramping up production. The company's ability to secure additional funding and manage its capital and debt structure effectively are among the uncertainties highlighted.

The company's reliance on a few customers for a significant portion of its business, international sales risks, supply chain management challenges, and other factors are also mentioned as potential risks.

This news article is based on a press release statement from Wolfspeed, Inc. With revenue of $804.5 million in the last twelve months and a gross profit margin of 6.3%, the company faces significant challenges in achieving profitability. For deeper insights into Wolfspeed's financial metrics, valuation, and growth prospects, investors can access detailed analysis through InvestingPro's extensive database of over 1,400 US stocks.

In other recent news, Wolfspeed, Inc. has reported its financial outcomes for the first quarter of fiscal year 2025, with an emphasis on non-GAAP results. Despite facing challenges in the market, the company's forward-looking statements suggest optimism about future performance. In a significant development, Wolfspeed's shareholders approved all proposals at its Annual Meeting, including the election of nine board nominees. The company has also announced the appointment of Thomas H. Werner as the new Executive Chair, with a compensation plan detailed in a recent filing.

Additionally, Mizuho (NYSE:MFG) revised its outlook on Wolfspeed, lowering the price target but maintaining an Underperform rating. This adjustment followed the departure of CEO Gregg Lowe and ongoing market challenges, including potential changes to the consumer EV tax credit and a possible follow-on offering from Wolfspeed. These are the recent developments that investors should note.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.