Wolf speed (NYSE: WOLF) The stock posted explosive gains during Friday trading. The company’s share price ended the trading day up 31% and was up as much as 35.4% earlier in the daily session.
Wolfspeed shares gained ground on news of compensation for executive chairman Thomas Werner and filings with the Securities and Exchange Commission (SEC) showing that insiders had recently acquired shares. In addition to these catalysts, the company’s stock price also appears to have benefited from a wave of bullish momentum for meme stocks.
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Earlier this week, Wolfspeed announced that CEO, Gregg Lowe, would be stepping down from his position this month and also departing from the company’s board of directors. In conjunction with the announcement, the company stated that Chairman Thomas Werner would also step into the role of Executive Chairman as the technology specialist works to select the next CEO.
Details of Werner’s compensation as executive chairman were shared in a filing with the SEC yesterday. Werner is scheduled to receive $150,000 in cash per month, in addition to $250,000 in restricted stock units. The executive chairman acquired 37,500 shares on November 20.
In addition to details about Werner’s pay package and takeover filing, filings with the SEC also showed that other members of the company’s board of directors had acquired significant amounts of stock the same day. Board member Duy-Loan T. Le acquired 20,000 shares on November 20. Meanwhile, Darren Jackson acquired 36,795 shares and Stacy Smith acquired 30,376 shares.
As board members begin acquiring shares and receiving stock as a substantial part of their compensation packages, investors are seeing signs that company insiders are optimistic about Wolfspeed’s future. As famed investor Peter Lynch once said, “Insiders may sell their stocks for all kinds of reasons, but they buy them for only one reason: they think the price will rise.” Recent share purchases by board members are a positive indicator for the shareholder base as a whole.
On the other hand, Wolfspeed’s explosive stock growth also appears to have been helped by a broader rally for meme stocks. Even after today’s big hit, the company’s share price is still down 81% this year. While stocks could continue to enjoy a comeback rally in the near term, there is no news on the core assets that could drive the recent rally – and that opens the door to volatile trading in the absence of substantial bullish catalysts. .
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Wolfspeed. The Motley Fool has a disclosure policy.
Why Wolfspeed Stock Skyrocketed Today was originally published by The Motley Fool
