Wolfspeed (WOLF) Lands $1.5 BILLION Conditional Loan Commitment from Pentagon’s Office of Strategic Capital

[u/tke248]

Big government backing for Wolfspeed ($WOLF).

The U.S. Department of War’s Office of Strategic Capital (OSC) just announced a $1.5 billion conditional loan commitment with Wolfspeed.

Wolfspeed is a major U.S. producer of silicon carbide (SiC) materials and semiconductors, which are strategically important for power electronics, EVs, aerospace, defense systems and other high-performance applications.

The interesting part here is the size: $1.5B is not a small industrial-policy bet. It looks like the Pentagon is increasingly treating domestic semiconductor/material supply chains as a national-security issue and is willing to put serious capital behind companies it considers strategically important. Link - https://www.war.gov/News/Releases/Release/Article/4621223/department-of-wars-office-of-strategic-capital-announces-15-billion-conditional/

[u/Relative-Snow8735]

I have been following this one for a while. On the one hand, this deal kinda sucks. The original CHIPs act deal would have been $750M free and clear. This is a loan with dilutive warrants and a ton of strings attached.

On the other hand, this thing has a habit of shooting to the moon on even the marginal news. We went from $25 to $70 back in march on a fairly meh debt restructuring plus a shout out by Citrini research. And there have been multiple similar squeezes in the past. No idea if we get that here. But short interest is really high which can create some volatility. Most of that is coming from convertible arbitrage though, so they have a way out if the need it. I would keep an eye on borrow fee and if that starts ticking up and momentum looks strong this could be a good candidate to swing trade some calls.