Wolfspeed Inc. (WOLF) shares plummeted 45.03% in pre-market trading on Friday, hitting their lowest level since 1998. The sharp decline comes a day after the chipmaker announced a leadership change, appointing chip industry veteran Robert Feurle as its new CEO effective May 1.
The stock's dramatic fall can be attributed to several factors. Firstly, the unexpected CEO change has raised concerns among investors about the company's future direction. This comes just months after Wolfspeed ousted its previous top boss, Gregg Lowe, without cause in November. Secondly, the company has been facing ongoing challenges, with its stock already down 19.2% year-to-date before this latest plunge.
Adding to the downward pressure is the high short interest in Wolfspeed's stock. According to Ortex estimates as of March 27, about 32.5% of WOLF's free float is in short position, indicating significant bearish sentiment among traders. The combination of these factors has led to a perfect storm for Wolfspeed's stock, resulting in a loss of nearly half its value in a single trading session and extending its losses to approximately 40% for the month of March alone.
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