Wolfspeed, Inc. (NYSE: WOLF) revealed that it has priced an upsized offering of $650 million 0.25% convertible senior unsecured notes due 2028 in a private offering to eligible purchasers. Shares of the company declined 1.9% at the time of writing.
The company develops wide bandgap semiconductors, focused on silicon carbide and gallium nitride materials and devices for power and radio frequency applications such as transportation, power supplies, power inverters, and wireless systems.
The initial purchasers have an option to purchase, for settlement within a period of 13 days from, and including, the date notes are first issued, up to an additional $100 million aggregate principal amount of notes. The offering to initial purchasers is expected to settle on February 3, 2022.
The net proceeds from the offering are expected to be about $634.6 million, which Wolfspeed plans to use for general corporate purposes. The notes will mature on February 15, 2028.
Furthermore, the initial conversion rate for the notes is 7.8602 shares of Wolfspeed’s common stock per $1,000 principal amount of notes or about $127.22 per share of Wolfspeed’s common stock. Settlement of conversions will be either in cash, shares of Wolfspeed’s common stock, or a combination thereof, at Wolfspeed’s election.
Stock Rating
Last week, BMO Capital analyst Ambrish Srivastava maintained a Hold rating on the stock with a price target of $90 (downside potential of 4.5%).
Based on 4 Buys, 3 Holds and 2 Sells, the stock has a Hold consensus rating. The average Wolfspeed price target of $126.86 implies 34.6% upside potential from current levels. Shares have declined 11.9% over the past year.
News Sentiment
News Sentiment for Wolfspeed is Negative based on 13 articles over the past seven days. None of the articles have Bullish sentiment, compared to a sector average of 63%, while all have Bearish Sentiment, compared to a sector average of 37%.
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