u/funfactsarecool

Its a stretch (and maybe a long one) but I wouldn't be too surprised if this had a relationship to the rumors we've been seeing about a government contract.

Me again. See two previous posts for DD on WOLF and CLF. I have to admit I fucked up in the last post but in the best possible way. I will explain.

Today the department of energy announced $700 million in DPA Title III funding for coal plants. Using the same emergency law & agency that I said was about to fund WOLF and CLF.

See the previous posts for what the companies actually do because it's worth understanding. TLDR: about a month ago the White House said they were going to use this funding measure for power electronics and GOES.

Now where I fucked up: in my research of Wolfspeed's filings I came across covenants referencing a $750m investment from the DOE. Because the number was the same as the CHIPS grant, I figured that's what the document was referencing. I was wrong. It is in addition to the CHIPS grant.

Today's news is what made it click for me.

The Trump administration just used the DPA to deploy $700 million to coal plants. $425 million to keep 13 existing plants running,$185 million to build two new ones, $75 million for an export terminal.

NOW HOLD THAT THOUGHT

On April 20, 2026, the President issued a presidential determination. It designated the following as essential to national defense under the same DPA:

"transformers... power control electronics..and electrical core steel"

Power control electronics. That is the category that covers SiC, solid-state transformers, and everything that makes 800V data centers possible.

If they just wrote $700M to coal (a crappy industry let's be honest) using the same authority, how much do you think they are going to deploy for the technology that literally enables the AI infrastructure buildout that the entire US economy is betting on??????

I will tell you exactly: $750 m to Wolfspeed. Plus another $750 million from the CHIPS Act. $1.5 billion total.

And I can prove it.

On March 26, 2026: the same day Wolfspeed closed its 1.5L convertible note refinancing, their lawyers filed a boring document with the SEC.

Clearly nobody read it.

Buried in Section 8.02(j):

" first-priority Liens on the Siler City Assets securing DOE Financing permitted under Section 8.01(X) and (y) first-priority Liens on the Siler City Assets representing a federal interest and security interest in favor of the United States Department of Commerce, the CHIPS Program Office or any other Governmental Authority of the United States securing obligations permitted under Section 8.01"

and then:

"(xii) Indebtedness and other obligations secured by the Siler City Assets in an outstanding amount not to exceed at any time (1) $750,000,000 of obligations in respect of any DOE Financing, plus (2) $750,000,000 of obligations to the United States Department of Commerce, the CHIPS Program Office or any other Governmental Authority of the United States, in each case under this Section 3.12(B)(xii)(2), in respect of award disbursements received pursuant to governmental grants under the CHIPS Act;"

Claude, translate for non-lawyers:

Wolfspeed's existing creditors — the people holding $783 million of 9.875% senior secured debt — formally agreed to step back and let the DOE and the CHIPS Program Office take first priority liens on Siler City as collateral for their financing.

Siler City is the John Palmour Manufacturing Center. The world's largest SiC wafer fab. A $1 billion facility.

You do not ask your existing secured lenders to subordinate their claims on your most important asset unless you have an active, negotiated financing with the federal government that specifically requires that collateral. Latham and Watkins — Wolfspeed's restructuring counsel, one of the top firms in the country — drafted this. The 1L note holders consented to it. It was filed with the SEC.

This is not speculation. The legal plumbing is built, the creditors have consented, the collateral is pledged. The announcement is the only missing piece.

WOLF rn:

~$783M of 1L Notes at 9.875% cash plus 4%= effectively 14% plus $1.17B of other debt at 3%

=$143M per year disappearing into the void (& Fab running way under utilization)

Let's say 100% of DOE loan proceeds are used to repurchase the 1L notes. $750M of 14% debt gets replaced with $750M of 3.5% debt. That saves ~83m per year.

The entire market is scared to invest in Wolfspeed because they are riddled with debt and way under utilization. WHAT HAPPENS WHEN BOTH OF THOSE THINGS CHANGE??

I am screaming this at you so hopefully the WSB algo picks this up and shows it to you. If you have the attention span to make it this far in today's day and age you deserve to make money.

The only question is when and the only honest answer is I don't know. The DPA announcement sets a 90 day time period to implement notices for funding so that puts us in July/August.

Currently trading around $67. YEs Its UP a LoT. It will go much higher.

EMBRACE YOUR INNER REGARDED WOLF. This company is a piece of shit. BUT NOT FOR LONG

Positions: 1000 shares and 40 calls. Hope tomorrow is down because I will roll them further out and higher.

AWWWWOOOOOOOOOOOOO

Sources:

https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-grid-infrastructure-equipment-and-supply-chain-capacity/

https://www.sec.gov/Archives/edgar/data/895419/000119312526126490/d138673d424b3.htm

New management, same brand new facilities. Maybe they never reach full utilization but I'm betting they do until I see something that convinces me otherwise.