A securities class action has been filed against Wolfspeed, Inc. (WOLF) on behalf of all investors who purchased or otherwise acquired Wolfspeed securities between August 16, 2023 through November 6, 2024. This case has been filed in the USDC – NDNY.
The alleged misrepresentations in this case focus on Wolfspeed’s Mohawk Valley fabrication facility. In pertinent part, Defendants provided the public with revenue projections that depended on the Mohawk Valley fabrication facility ramping its production to meet and/or exceed demand for its 200mm wafer product.
Wolfspeed provided these overwhelmingly positive statements to investors while, at the same time, misrepresenting and/or concealing material adverse facts concerning the true state of Wolfspeed’s growth potential and, in particular, the operational status and profitability of the Mohawk Valley fabrication facility. First, to meet its publicly stated projections, the Company would have to cancel or otherwise indefinitely suspend planned future projects such as the facility in Saarland, Germany. Second, the Company would have to terminate a significant portion of its workforce (approximately 20%) and shutter the Durham fabrication facility.
On November 6, 2024, Wolfspeed announced its financial results for the first quarter of fiscal year 2025 and unveiled guidance for the second quarter well below expectations. While Defendants had repeatedly claimed that 20% utilization of the Mohawk Valley fabrication facility would result in $100 million revenue out of the facility, Defendants now guided to a range 30% to 50% below that mark. The Company attributed its results and lowered guidance to “demand … ramp[ing] more slowly than we originally anticipated” as “EV customers revise their launch time lines as the market works though this transition period.”
Investors and analysts reacted immediately to Wolfspeed’s revelation. The price of Wolfspeed’s common stock declined dramatically. From a closing market price of $13.71 per share on November 6, 2024, Wolfspeed’s stock price fell to $8.33 per share on November 7, 2024, a decline of about 39.24% in the span of just a single day. Investors who purchased Wolfspeed stock prior to this disclosure did so based on materially misleading information and suffered damages as a result.