Why Wolfspeed Stock Is Skyrocketing Today
the shares of Wolfspeed (NYSE: WOLF) Wednesday’s trading sees explosive gains The silicon carbide specialist’s share price is up 25% as of 1pm today, amid a 1.5% gain. S&P 500: index and a 2% jump Nasdaq Composite: the index.
Wolfspeed is surging today after news of the fundraiser and the company’s CHIPS Act announcement.The stock is also getting a boost from the latest Bureau of Labor Statistics (BLS) inflation report.
Wolfspeed issued a press release today announcing that it has raised approximately $200 million through a new share sale. The company sold approximately 27.79 million shares of common stock and will use the proceeds to strengthen its capital structure, reduce leverage and improve its balance sheet. to resolve outstanding due dates.
Now that the stock sale is complete, Wolfspeed says it’s one step closer to receiving funding through the CHIPS Act.Although the company ended its last fiscal quarter with $1.7 billion in cash and investments, it’s on record heavy losses and ended the period with $3 billion in long-term debt and $3.1 billion in long-term liabilities.The CHIPS Act funding should give the company some financial flexibility.
Stocks are also rising on rising macroeconomic news.The latest Consumer Price Index report showed core inflation was 3.2% in December, below the 3.3% mark expected by economists.The report eased inflation fears and making it more likely that the Federal Reserve will continue to cut interest rates this year.
Despite today’s explosive gains, Wolfspeed’s shares are still down 82% over the past year, as demand for electric vehicles has weakened and planned expansion initiatives have been put on hold. The silicon carbide specialist has also yet to find its next CEO is in the process.
In another press release issued today, Wolfspeed announced that it will report its second quarter results for the current fiscal year on January 29. The company will also hold a conference call to discuss results, business operations and future initiatives.
Investors will get a closer look at the state of the business in an upcoming quarterly report, and the company may reveal details about its management transition plans and future growth initiatives.
After the massive stock sale, Wolfspeed may have the potential for a big return, but the company needs to show it has a feasible path to improving its margins.
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