Activist investor Jana Partners is pushing Wolfspeed Inc. to explore all options to enhance shareholder value, including a potential sale. Jana, which holds a ‘significant’ stake in Wolfspeed, sent a letter urging the company to evaluate ‘all avenues’ to improve its performance and consider ‘strategic alternatives.’
According to the letter, such an exploration could uncover various value-enhancing opportunities, including a sale. The letter was addressed to Wolfspeed’s board of directors.
Wolfspeed’s stock has dropped nearly 50% since the beginning of the year and 63% over the past 52 weeks due to missed financial and operational milestones, raising concerns about its strategy and capital allocation. Jana notes that, despite Wolfspeed’s technological capabilities and role in the energy transition, current shareholders have faced significant losses.
Jana’s managing partner, Scott Ostfeld, and founder, Barry Rosenstein, emphasize the need for a comprehensive review of strategic alternatives to address the company’s performance. Goldman Sachs has reportedly assigned a price target of $126 per share for a potential acquisition, a significant premium over Wolfspeed’s current share price of $22.12.
The letter further suggests that Wolfspeed consider a ‘back to basics’ approach, prioritizing execution and meeting key milestones at its new facilities. It also urges the company to re-evaluate future investments, including the planned European manufacturing facility, until it demonstrates delivery on its existing business.
Jana had a small stake in Wolfspeed in the third quarter of 2023, but its latest stake is not disclosed in regulatory filings. Jana has a history of investing in companies and advocating for changes to enhance shareholder value.
