Wolfspeed is a Silicon Carbide chip manufacturer in U.S. The stock was down all the way to $2. It has taken on a large amount of debt ($7B) to build 2 large US factories. The goal is to 30x their capacity.
One of the factories makes the wafers (which are extremely difficult to make) and the other makes chips from those wafers. They are vertically integrated, selling both wafers and chips.
Their build out is almost done, so I expect them to stop losing money and report positive outlook.
They have a large backlog of design wins around 12B. That's mostly locked in revenue.
The super low price was partially due to debt and partially due to large shorting possibly by hedging debtors, which might be unraveling as it's up above $4 as of this morning. Ths also puts the company above the $500m valuation criteria for posting here.
There is some question about Wolfspeed receiving it's promised CHIP funding. The interim CEO recently announced in a video that they expect the funds by the end of summer.
A German company (Infineon) attempted to buy Wolfspeed years ago, but the US government blocked it because of national security.
Finally, one of the major factories they just built is in North Carolina. It's a swing state and the Republican senator Ted Budd publicly supported Wolfspeed on X/Twitter. I don't believe this administration could let such a company go bankrupt by withholding CHIPS funds. It would be very bad politically. The CEO also said recently they are not fully relying on any particular funding.
Full disclosure: I am holding 55000 shares with average price of $4.77. Planning to hold long term.
Reposting with screenshot.
Go Wolfspeed 🚀
