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Technology Stocks : Wolf speed
WOLF 30.76-0.4%9:30 AM EDT
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To: Lou Weed who wrote (10689)5/21/2025 10:27:48 PM
From: teevee2 Recommendations

Recommended By
Lou Weed
OldAIMGuy

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The Chapter 11 is a staged Chapter 11 by Wolfspeed and the large creditors. This is necessary so that WOLF remains compliant with criteria for CHIPS ACT eligibility. I suspect being offside on loan covenants is what got in the way of restructuring debt due in 2026 and 2028. No doubt equity will get hurt in some way, but I don't think it will be wiped out. WOLF's process is largely proprietary. If creditors took the company, they couldn't operate it; and a significant portion of WOLF's business is classified as it provides SiC semiconductors to the military. For national security reasons alone, WOLF can't go down because the US military can't rely on the EU and China for its SiC semiconductors. Also, no one else is growing 200 mm SiC crystals. I expect this Chapter 11 will be a unique and most interesting one once we get to see some details. Like everyone else, I am deeply under water on my cost base on WOLF stock that I hold. It is so close to zero, I would rather hold than sell it for salvage. It may be an interesting speculation to buy the stock down here, however, at this time, I don't want to throw good money after bad.
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