Wolfspeed in Activist Investor’s Crosshairs

Activist investor Jana Partners has set its sights on Wolfspeed due to concerns over the company's declining share price and production delays. Wolfspeed, known for its silicon carbide (SiC) power devices used in electric vehicles, has been in the process of constructing a 200mm fab and wafer plant in the US. Jana Partners, holding an undisclosed stake in the company, recently reached out to the board of directors with suggestions on how to improve the share price. One proposed solution is the potential sale of all or part of the vertically integrated company, with a focus on the wafer production business over device production.

The supply of SiC wafers and devices plays a crucial role in the electric car industry, especially as manufacturers transition from 150mm to 200mm SiC wafers to increase volume and reduce production costs. Despite these strategic moves, Wolfspeed's share price has hit an all-time low, currently hovering around $24. In response to Jana Partners' letter, Wolfspeed stated, "The company continually evaluates options to enhance long-term value and is committed to acting in the best interests of all our shareholders. The Wolfspeed Board will carefully review Jana’s letter, and we look forward to engaging with them in the near future."

Last year, Jana Partners made waves in the avionics industry by targeting Mercury Systems. This move led to the retirement of chairman William O’Brien, who was succeeded by Bill Ballhaus, Mercury’s Interim President and CEO. Scott Ostfeld, managing partner at Jana, also assumed a position on Mercury's board of directors and played a key role in the search for a new CEO, ultimately appointing Ballhaus to the position.

O’Brien expressed his support for the changes, stating, “The changes to our Board’s leadership reflect the natural evolution of the Mercury Board to guide the Company’s next chapter. Strengthening our Board with additional operational and financial expertise is also critical to our efforts to enhance value for all our stakeholders." Ostfeld commended the board for its actions, emphasizing the importance of setting Mercury on the right path and assembling a refreshed leadership team.

For more information on Wolfspeed and Jana Partners, visit their respective websites at www.wolfspeed.com and www.janapartners.com.