Activist investor Jana has ‘significant’ stake in Wolfspeed, urges semi manufacturer to consider sale

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Scott Ostfeld, managing partner and portfolio manager with JANA Partners LLC., speaks during the 13D Monitor’s Active-Passive Investor Summit in New York City, U.S., October 17, 2023. 
Brendan Mcdermid | Reuters

Activist investor Jana Partners has a built a “significant” position in semiconductor firm Wolfspeed and is calling on the company to resolve a “staggering erosion of shareholder value,” up to and including a sale.

The activist disclosed the position in a Monday letter to Wolfspeed’s board viewed by CNBC, where it wrote that the semiconductor firm’s “differentiated manufacturing capabilities” and status as an “American supplier supporting the energy transition” gave it significant intrinsic value. In the letter, Jana Partners also wrote that that management’s missteps around capital allocation, execution and strategy had depressed the stock.

Shares of Wolfspeed surged nearly 9% on news of Jana’s position, which was first reported by Reuters. Still, the company’s shares are down more than 70% from their 2021 highs.

Jana called on the board to set and execute on metrics and key milestones for two of Wolfspeed’s chip fabrication plants in Mohawk Valley and Siler City and identify a “clear funding path” for future expenses, including CHIPS Act funds.

The activist noted that Wolfspeed has a 10-year total-shareholder return of -61%, compared to a 331% median TSR for its self-selected peer group.

Wolfspeed, formerly known as Cree, is a supplier of electronic components and semiconductors used to manage electricity, often in cars. It also sells materials for producing those kinds of chips. 

The activist also said that Wolfspeed’s board should “promptly” begin a comprehensive review of the business, up to and including a sale. Jana cited multiple analyst notes which highlighted Wolfspeed’s M&A potential, either via its subsidiary lines or the entire business.

Jana was founded in 2001 by Barry Rosenstein. Scott Ostfeld became Jana’s managing partner in 2023. The activist has had successful engagements at Freshpet, New Relic and Qualcomm. Jana has also taken positions at Trimble and telecommunications firm Frontier.

CNBC’s Kif Leswing contributed to this report.

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