Scott Ostfeld, Managing Partner and Portfolio Manager at JANA Partners LLC., speaks at the 13D Monitor Active/Passive Investor Summit in New York City, USA on October 17, 2023.
Brendan McDiarmid | Reuters
Activist investor Jana Partners said in a letter Monday that the company has a “significant” position in the semiconductor maker. wolf speed It called on the company to resolve what it called an “astounding erosion of shareholder value,” including a sale.
In a letter to the Wolfspeed board seen by CNBC, Jana said the company’s “differentiated manufacturing capabilities” and status as “America’s supplier supporting the energy transition” give the company significant fundamental benefits. I wrote that it provides value. Jana also wrote that management’s failures in capital allocation, execution, and strategy depressed the stock price.
Wolfspeed said in a statement Monday night that its board will “carefully consider” Jana’s letter.
“The company continually evaluates options to enhance long-term value and is committed to acting in the best interests of all shareholders,” the company said.
Wolfspeed shares rose nearly 9% on news of Jana’s position, which was first reported by Reuters. Still, the company’s stock price is down more than 70% from its 2021 high.
Mr. Jana directed the board to establish and implement metrics and key milestones for Wolfspeed’s two chip manufacturing facilities in the Mohawk Valley and Siler City, and to provide funding for future spending, including CHIPS Act funds. It called for identifying “clear funding channels.”
The activist noted that Wolfspeed’s 10-year total shareholder return was -61%, compared to a median TSR of 331% for its peer group.
Wolfspeed (formerly known as Cree) is a supplier of electronic components and semiconductors often used in automotive power management. The company also sells the materials used to make such chips.
Jana said Wolfspeed’s board should “immediately” begin a comprehensive review of the business leading up to a sale. Jana cited multiple analyst notes highlighting the potential for mergers and acquisitions through Wolfspeed’s subsidiary units or the business as a whole.
Jana was founded in 2001 by Barry Rosenstein. Scott Ostfeld will become Jana’s managing partner in 2023. The activist has had success with Freshpet, New Relic, and Qualcomm. Mr. Jana also held positions at Trimble and the telecommunications company Frontier.
— CNBC’s Kif Leswing contributed to this report.