| To: Lou Weed who wrote (10653) | 8/30/2024 6:27:52 PM | | From: teevee | | | | looked again at 2022 notes. Interest rate is low, and coversion is capped between about $118 and $220/share, so I expect note holders have very large short positions as the notes are "insurance" if the short went against them.
As for the 2023 loan at 9.975% interest, I can't find any covenants that might trigger default and a push into Chapter 11 or worse.
It appears that as long as WOLF can pay interest, creditors can't take action. |
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| To: teevee who wrote (10654) | 8/31/2024 12:02:20 PM | | From: Lou Weed | | | | | I'm just swing trading it right now with the hopes that one of my positions is on when they announce a takeover bid. Can't see why someone like Onsemi, ADI or TXN wouldn't jump at it right now. Lowe has really stunk the joint up here...... |
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| To: teevee who wrote (10654) | 8/31/2024 12:53:26 PM | | From: EvanG | | | | From what I have seen it is mainly Chinese articles taking about bankruptcy
finance.sina.com.cn
Analyst Lu Xingzhi said about Wolfspeed's financial situation: "Looking at Wolfspeed's financial report figures, I feel that this company is going to declare bankruptcy protection or sell at a low price . It used to have a good hand, but now it has become a bad hand." He pointed out that the company faces a full cost of up to $17,000 (currently about RMB 121,000) for each $10,000 (currently about RMB 71,257) wafer sold, resulting in huge losses. He also mentioned that the company currently has $2.2 billion in cash reserves, but faces a capital expenditure of at least $600 million per quarter, and its financial situation is precarious. |
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| To: Lou Weed who wrote (10655) | 8/31/2024 7:36:08 PM | | From: teevee | | | | Ownership in WOLF is very concentrated with top 4 holders owning about 40% of the share cap, and
top 10 holders owning about 65% of the stock. A takeover of WOLF can't happen without the top 4 shareholders agreeing, and their cost base is far above the current share price. I don't see bankruptcy or
a takeover happening, and one of the reasons why I own the stock. I am however, paying the price for being a bit early and currently down about 60%!!! Regardless, the assets alone are worth $5 billion and the Wolfspeed "secret sauce" also has considerable value as few if any competitors can duplicate what WOLF is currently doing. |
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| To: teevee who wrote (10657) | 9/1/2024 5:00:16 PM | | From: Lou Weed | | | | Thanks for the feedback teevee. Interesting on the top 4 holders owning 40%. Just thinking out loud as to how much of their stake in WOLF is compared to their overall assets? If they are sitting on substantial gains in other holdings (most likely), would they not be open to a premium from where we are now, so they can offset some of their realized gains for tax purposes? Again....this is conjecture on my part but it could be valid. We shall see.....
<<Wolfspeed "secret sauce" also has considerable value as few if any competitors can duplicate what WOLF is currently doing.>>
I believe that used to be the case. Their competitors are gaining market share and from what I'm hearing, the Chinese substrate quality is constantly improving. The Chinese also have one big advantage currently over Wolfspeed.....that's China Inc.
It shall be very interesting to see how this plays out. I'm sticking with my strategy of swing trading it for small gains in the short term with the hopes of holding a position when and if they announce a takeover. Whatever happens, the BOD needs to seriously consider Lowe's performance, for the sake of the shareholder base. |
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| To: teevee who wrote (10657) | 9/2/2024 12:17:36 PM | | From: Lou Weed | | | | FYI......Just checked the monthly all-time chart out of curiosity. We've only been at this level on the RSI 3 times in the past. The first time it took about a year for real upside momentum. The 2nd and 3rd time led to the doldrums for ~3 years before any upside momentum.
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| To: Lou Weed who wrote (10659) | 9/2/2024 5:07:04 PM | | From: teevee | | | | WOLF is expensing the expansion as opex, thus the big losses against sales and miniscule margins. The silver lining is tax credits down the road. Not only are the assets worth $5 billion, but expensing the expansion as opex, adds $billions more in value. I agree that at best, WOLF is now dead money for at least 12 months.
On the bright side, batteries are coming that have densities betwee 400 and 800 Kwh/kg. That is a game changer for EV's and also makes electric aircraft feasible.... Aside, GM and POSCO are building a CAM plant at Becancour, Quebec, Canada. I suspect POSCO has educated GM that spodumene is the only scalable source of lithium. That spells the end for companies like LAC who are trying to recover lithium from clays which has never been commercially achieved or shown to be scalable. |
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| From: ynotgoal | 10/11/2024 10:52:30 AM | | | | | | Wolfspeed jumps after Roth Capital cites talks of supply deal
seekingalpha.com
Wolfspeed (NYSE:WOLF) stock rose about 10% on Friday after Roth Capital noted that the company is in final negotiations to supply 200mm wafers to a few major third-party customers.
The firm maintained its Buy rating and $25 price target on the stock.
Analysts led by Craig Irwin noted that its sources confirmed that Wolfspeed is in final negotiations to supply 200mm wafers to a few major third-party customers. These agreements could include material up-front cash payments.
The analysts added that clients thinking low-cost Asian producers are a threat need to remember global power semis Original Equipment Manufacturers, or OEMs, see a greater advantage in moving to larger wafer sizes with a proven supplier. The analysts expect announcements shortly.
Customers want continued access to large diameter silicon carbide, or SiC, wafers (as these are the most economical), so the analysts believe Wolfspeed's leadership here has customers slow to qualify newer entrants.
Irwin and his team expect that the company could get the CHIPS Act funding before the election. Wolfspeed is negotiating final terms for a memorandum of terms with the CHIPS office for the federal loan.
In addition, the analysts added that charges for the Durham facility exit are likely much lower than feared. They believe the charges for the company's management's accelerated exit of the Durham facility are likely well under the $1B, which has been considered a worst case scenario.
Wolfspeed (WOLF) has a Strong Sell rating at Seeking Alpha's Quant Rating system, which consistently beats the market. The Seeking Alpha authors' average rating is more positive with a Buy, but the average Wall Street analysts' rating is Hold.
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| To: ynotgoal who wrote (10661) | 10/11/2024 11:02:36 AM | | From: slacker711 | | | | FWIW, there was a technical conference a few days ago where Wolfspeed stated outright that they are going to sell 200mm wafers to competitors.
It is possible that this could also be a condition of funding for the Chips Act funding of the Siler facility. |
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| To: ynotgoal who wrote (10661) | 10/15/2024 8:35:05 AM | | From: ynotgoal | | | | Wolfspeed Announces $750M in Proposed Funding from U.S. CHIPS Act and Additional $750M From Investment Group Led By Apollo, Galvanizing Global Leadership in Delivering Next-Generation Silicon Carbide Technology
finance.yahoo.com
Summary of the PMT
The PMT outlines key terms for a CHIPS incentive award, including the proposed amount and form of the award, and provides that the disbursement of funds will be conditioned upon the achievement of certain operational and construction milestones and other requirements.
The PMT includes an obligation for Wolfspeed to raise an aggregate of $750 million in debt financing over three tranches through the issuance of senior notes under an amended and restated indenture. Wolfspeed and its lenders, led by Apollo funds, have reached an agreement for this additional financing, including $250 million to be available within 10 business days, and have agreed to certain intercreditor terms with the CHIPS Program Office as described in the PMT.
Together, the PMT and the agreement with lenders also requires:
Wolfspeed to undertake further actions with respect to its capital structure, including (a) restructuring or refinancing its outstanding 2026, 2028 and 2029 convertible notes at specified intervals prior to their respective maturity dates, (b) deferring a total of $120 million in cash interest payments due prior to June 30, 2025 under an unsecured customer refundable deposit agreement, and (c) raising up to $300 million of additional capital from non-debt sources over the next 12 months.
In addition, Wolfspeed has agreed with its lenders to certain revisions in the terms of the senior notes, including revisions to the interest rate applicable to the senior notes, as described in the Form 8-K filed today with Securities and Exchange Commission (SEC).
The PMT provides that the award is subject to due diligence and the negotiation and signing of a definitive direct funding agreement with the Department of Commerce and the negotiation and signing of an intercreditor agreement between the Department of Commerce and the Company’s lenders, which may contain different or additional conditions not contained in the PMT. Additional terms of the PMT were not disclosed.
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