Wolfspeed’s Shares Plunge to 27-Year Low Amid Uncertainty Over Federal Funding

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Shares of Wolfspeed, a prominent chipmaker, dropped by 50% on Friday, hitting their lowest point since 1998. This significant decline stems from uncertainty surrounding the company’s eligibility for federal funding under the U.S. CHIPS Act. Wolfspeed is awaiting approximately $750 million in subsidies promised by the 2022 bipartisan CHIPS Act, which allocated $52.7 billion in federal funds to boost U.S. semiconductor manufacturing.

However, Wolfspeed’s future funding remains in limbo as the company is left vulnerable to changes in the administration’s stance on the law. President Donald Trump has recently voiced opposition to the CHIPS Act, calling for its repeal in favor of using its funds for debt reduction. This has increased concern over the company’s ability to secure the much-needed funds.

Analysts warn that without the CHIPS Act grant, Wolfspeed may face devastating consequences, including the need for major restructuring. The company had hoped the funding would help it accelerate the production of silicon carbide chips, essential for electric vehicles and renewable energy.

As of Friday, Wolfspeed’s shares were trading at $2.72, marking a 59% decline in value for the year. The company has also made changes in leadership, appointing Robert Feurle as CEO, effective May 1. Additionally, Wolfspeed has secured $865 million in tax credits to strengthen its financial position.

Elon Musk Faces Fraud Lawsuit Over Delayed Twitter Stake Disclosure

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Elon Musk must face a fraud lawsuit after a U.S. judge ruled that shareholders sufficiently alleged that he defrauded them by delaying the disclosure of his Twitter stake, now known as X. U.S. District Judge Andrew Carter in Manhattan rejected Musk’s attempt to dismiss the case, which was brought by former Twitter shareholders, including the Oklahoma Firefighters Pension and Retirement System.

The lawsuit claims that Musk’s delayed SEC filing on his initial 5% Twitter stake, which was not disclosed until 11 days after the March 24, 2022, deadline, caused shareholders to sell their stocks at artificially low prices, ultimately costing them more than $200 million. Musk’s eventual filing revealed that he had acquired a 9.2% stake, which sent Twitter shares up by 27% in early April 2022.

Judge Carter found that Musk’s filing and his tweets about potentially creating a Twitter rival or altering the platform’s logo could have misled investors into thinking Musk was making a “passive” investment and did not intend to take over the company. While some claims were dismissed, the case will proceed to explore whether Musk’s actions were fraudulent.

CoreWeave’s IPO Faces Challenges Amid Financial Concerns and Market Uncertainty

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CoreWeave’s upcoming initial public offering (IPO) is facing challenges, as concerns about the company’s financial health, including its significant debt load, and the timing of the listing may dampen retail investor enthusiasm. Despite backing from Nvidia, CoreWeave’s IPO is being launched in a market fraught with uncertainty, including tariff-related tensions and competition from China’s AI startup DeepSeek.

The company, specializing in AI infrastructure and cloud services, had initially targeted a fully diluted valuation of $32 billion but has since lowered it to around $23 billion after downsizing its IPO. Analysts, including Dan Coatsworth of AJ Bell, have pointed out that CoreWeave’s IPO may have been poorly timed, with AI-related interest cooling off since last year.

CoreWeave has also faced concerns over its long-term sustainability, particularly with its $8 billion debt, and its reliance on Microsoft for GPU demand. However, the company’s strong revenue growth, which more than doubled last year, remains a positive indicator. The IPO’s success will hinge on whether CoreWeave can maintain this momentum and meet earnings expectations.

Despite challenges, CoreWeave may attract retail investors seeking alternatives to the underperforming stocks of the Magnificent Seven tech giants. Some experts, including Josef Schuster from IPOX, believe that CoreWeave could benefit from investors diversifying beyond established players like Nvidia and Microsoft.