Wolfspeed shares nearly doubled Monday, continuing its sharp rise since announcing June 30 that it had filed for Chapter 11 bankruptcy protection.
A $1,000 investment in Wolfspeed at the June 30 closing of 40 cents would be worth $5,775 at Monday’s closing of $2.31.
The price increase Monday was preceded by Wolfspeed’s announcement that Gregor van Issum is joining as chief financial officer, effective Sept. 1. Van Issum worked at ams OSRAM with Robert Feurle, who became Wolfspeed’s CEO in May.
At ams OSRAM, van Issum gained experience in mergers and acquisitions and business transformation, according to the announcement.
Van Issum will relocate from the Netherlands to Wolfspeed’s headquarters in Durham.
“I witnessed Gregor’s strong analytical and leadership skills firsthand during our time working together at ams OSRAM. Gregor has helped lead large, multibillion Euro businesses with complex manufacturing operations, which will be invaluable to Wolfspeed as we unlock the potential of our purpose-built 200mm platform,” Feurle says in a release.
“In this new role, my priority will be providing Wolfspeed’s investors with transparency and clarity, especially during this transformative period,” said van Issum. “My background in transformation and restructuring also positions me to support Wolfspeed’s strategic focus on improving profitability.”
He also previously served as vice president, strategy of NXP Semiconductors’ Secure Transactions and Identification Solutions segment in Germany an as CFO of the Secure Identification Solutions and Analog Mixed Signal units.
Van Issum’s appointment follows the addition of David Emerson, who joined Wolfspeed in May in the newly created role of chief operating officer.
The bankruptcy filing and changes in leadership come as Wolfspeed nears completion of a $5 billion factory in Siler City that is expected to employ 1,700 workers in Chatham County. State and local incentives for the project total about $700 million if Wolfspeed hits investment and employment goals. The company is also negotiating with the White House over $750 million in grants promised under the Biden administration, but has come under criticism from President Donald Trump.
Wolfspeed operates plants in Durham and upstate New York.
Van Issum succeeds Kevin Speirits, who had been serving as interim CFO since May. Speirits had assumed the role after the departure of Neill Reynolds, who spent almost seven years in the position. Reynolds is now CFO of Raleigh-based Ralliant, which provides precision technologies.
Van Issum will receive a base salary of $500,000, a $450,000 signing bonus and an annual performance bonus of 75% of his then-current base salary. He’ll also receive $150,000 to help him relocate from the Netherlands. Restricted and performance stock options total about $5 million.
Wolfspeed shares have increased 485% since closing June 30 at 40 cents per share. Despite the gain, Wolfspeed shares remain down 90.1% over the past year, almost 65% since Jan. 1. Shares dropped about 288% between the time when Wolfspeed announced its plan to file for bankruptcy and its rally that started last week.
Before van Issum’s hiring, analysts said the sharp rally is likely a “combination of speculative interest and investor optimism” over the company’s restructuring plan, according to a Yahoo Finance report.
Wolfspeed has framed its bankruptcy filing as a financial reset.
“Upon emergence, Wolfspeed expects to be better positioned to execute on its long-term growth strategy and accelerate its path to profitability,” the company said in a statement released Monday to questions about investors’ reaction.
Wolfspeed has about $1.3 billion cash as of the third quarter of this fiscal year, which provides “sufficient near-term liquidity to support customers and pay vendors,” according to the company.
Wolfspeed gained creditors’ support and hopes to emerge from the process by the end of September. Upon emergence, the company says it will have reduced overall debt by approximately 70%, representing about $4.6 billion. It expects to reduce its annual cash interest payments by about 60%.