Why Wolfspeed Stock Imploded on Friday

Core Viewpoint - Wolfspeed's stock experienced a significant decline of 49.5% following the announcement of Robert Feurle as the new CEO, raising questions about investor sentiment towards the company and its leadership transition [2][3]. Group 1: Leadership Transition - Robert Feurle, a veteran in the chip industry, has been appointed as the new CEO of Wolfspeed, replacing interim Executive Chairman Thomas Werner, who will remain as chairman of the board [2]. - The leadership transition is planned to take effect on May 1, indicating a structured approach rather than a rushed decision [3][4]. - Feurle expressed confidence in navigating the company through its transformative period, aiming to refresh the operating plan and improve financial performance [4]. Group 2: Financial Concerns - Wolfspeed currently has a market capitalization of less than $850 million, coupled with a substantial debt of$6.6 billion, raising concerns about its financial health [5]. - The company reported losses exceeding its market cap last year, with an annual cash burn of $1.3 billion and only$1.4 billion in cash reserves [5].