Wolfspeed Stock Soars on Massive Pentagon Loan Commitment – Benzinga

Wolfspeed Stock Soars on Massive Pentagon Loan Commitment  Benzinga

Wolfspeed Inc. (NYSE:WOLF) shares jumped in after-hours trading Wednesday after the silicon carbide chipmaker got a conditional commitment for up to $1.5 billion in long-term financing from the U.S. Department of Defense. WOLF stock is soaring. See the chart and price action here. DoD Loan Details The money would come from the department's Office of Strategic Capital as a senior secured, delayed-draw term loan with a 30-year term. The proposed loan is nearly as large as Wolfspeed's market value, which was about $1.63 billion at Wednesday's close, per Benzinga Pro data. Wolfspeed plans to use the money to upgrade its gallium nitride epitaxy work for communications infrastructure and electronic warfare systems.

It also wants to make its current silicon carbide chips and future gallium nitride chips resistant to radiation. Both materials go into power and radio-frequency systems for defense, aerospace and AI. "SiC and GaN have critical national security applications," CEO Robert Feurle said. Feurle added that the scale and 30-year term of the commitment "reflect the long-term importance of the technology and manufacturing capabilities Wolfspeed has built in the United States." Read Also: Starlink Cash Can Carry SpaceX's $40 Billion AI Tab, Dan Ives Says Dilution Attached The loan comes with an equity kicker. Wolfspeed would give the department VWAP-based warrants for up to 7.5% of its fully diluted