TLDR
- Wolfspeed stock fell ~7% in premarket trading after announcing a potential sale of 24 million shares by existing stockholders
- The S-1 filing includes shares from existing holders, pre-funded warrants, and conversions of senior notes due 2031
- Wolfspeed will receive no proceeds from the sale
- On Monday, Wolfspeed signed an MoU with GE Aerospace to develop high-voltage SiC power modules for aerospace and defense
- One valuation narrative pegs fair value at $20, putting the stock ~128% overvalued at its last close of $45.54
Wolfspeed filed an S-1 late Tuesday outlining a potential sale of 24 million shares by existing stockholders. The stock dropped around 7% in premarket trading Wednesday in response.
The offering breaks down as 3.25 million shares from current holders, 2 million shares tied to pre-funded warrants, and roughly 18.82 million shares from conversions of senior secured notes due 2031. Wolfspeed takes home nothing from the transaction.
At its last close of $45.54, WOLF carries a market cap of around $2.1 billion.
The selling pressure isn’t surprising. When a large block of stock hits the market — especially from note conversions — investors tend to price in dilution risk fast.
GE Aerospace Deal Still Fresh
Just two days before the S-1 dropped, Wolfspeed announced a memorandum of understanding with GE Aerospace. The two companies plan to develop high-voltage SiC power modules targeting industrial, aerospace, and defense markets.
The deal involves Wolfspeed’s 10-kilovolt MOSFET technology, aimed at supporting next-generation power systems. GE Aerospace had just announced its own partnership with the U.S. military days prior.
The MoU didn’t provide enough lift to keep the stock moving higher before the share sale news hit.
Valuation Under the Microscope
WOLF has had a wild 2026. The stock is up roughly 230% year-to-date after rebounding from its bankruptcy filing last year, but it’s also down 32% over the past week and 15% over the past month.
That kind of chop reflects a market still trying to figure out what Wolfspeed is actually worth.
The most widely followed fair value estimate puts WOLF at $20 — meaning at $45.54, the stock is trading at roughly 128% above that figure. The estimate uses a 12.33% discount rate and factors in revenue growth assumptions tied to AI data center demand, EV recovery, and margin improvement.
Wolfspeed’s price-to-sales ratio sits at 3.1x, below the U.S. semiconductor industry average of 8.8x, but above its own calculated fair ratio of 1.4x.
The company posted a net loss of $519.6 million, and gross margins remain negative. The bull case depends on both those metrics improving — and on EV demand picking back up faster than expected.
The company’s SiC technology is increasingly relevant to AI data center buildouts, particularly the industry shift from 400-volt to 800-volt power architectures.
For now, the share offering has reset the near-term tone, and WOLF trades well above where most models say it should.
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