| | | Activist Jana Partners pushes Wolfspeed to explore sale of devices businessBy Svea Herbst-Bayliss, Reuters - 10:16 AM ET 10/22/2024Investment News
NEW YORK, Oct 22 (Reuters) -
Activist investor Jana Partners urged Wolfspeed Inc ( WOLF ) on Tuesday to boost its share price by increasing gross margins, exploring a sale of its device business and pursuing a partial sale of its silicon carbide wafer business to a strategic partner.
Such steps could push Wolfspeed's ( WOLF ) share price significantly higher, Scott Ostfeld, Jana Partners' managing partner said.
Wolfspeed ( WOLF ), the world's largest maker of silicon carbide, closed trading at $15.39 on Monday, having lost 64% this year.
Ostfeld spoke at the 13D Monitor Active-Passive Investor Summit in New York after the firm took a position in the company this year and pushed it to adopt a "back-to-basics" strategy that focuses on better execution and considers strategic opportunities such as a sale.
Last week, Wolfspeed ( WOLF ) said it added two new directors to its board and was awarded a $750-million grant under the federal CHIPS and Science Act.
Combined with $1 billion in cash tax refunds for advanced manufacturing and a combined investment from investors including Apollo, Baupost Group and Capital Group, the company secured $2.5 billion in total financing to complete building its next-generation silicon-carbide capabilities.
Ostfeld said this addresses Wolfspeed's ( WOLF ) funding needs, freeing the company to concentrate on running the business better and pushing shares higher.
News of the fresh cash and new directors drove Wolfspeed's ( WOLF ) shares up last week.
Ostfeld, who has served on a variety of public company boards, said he believes Wolfspeed ( WOLF ) management shares the hedge fund's sense of urgency to boost performance and the share price.
The hedge fund welcomed Wolfspeed's ( WOLF ) two new directors. Investment banker Woody Young, one of the new directors, joined Frontier Communications' board in February where Jana had also pushed for a sale. Last month telecom giant Verizon made a bid for Frontier and investors will vote on the deal next month. (Reporting by Svea Herbst-Bayliss; Editing by Rod Nickel) |
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