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Within an hour of trading Friday morning, the Durham semiconductor manufacturer Wolfspeed had lost half its value. Its shares dove below $2.80 before eventually plateauing around lunchtime. By percentage, it ended up being the biggest single-day decline in Wolfspeed’s 32 years as a public company.

The reason for this drop wasn’t immediately clear.

Unwelcome Wall Street turns have become common for the wobbling North Carolina firm, whose stock sold above $100 as recently as two and a half years ago. At that time, Wolfspeed was well into a transformation under then-CEO Gregg Lowe, divesting its lighting and radio frequency divisions — and ditching its original name, Cree — to exclusively produce a special semiconductor material called silicon carbide.

Wolfspeed both makes silicon carbide, which promises higher efficiency than standard silicon, and fabricates it into chips for electric vehicles, power systems and other industrial applications. In 2022, Wolfspeed opened a fabrication plant in New York State’s Mohawk Valley and announced plans to build a massive materials facility near Siler City in western Chatham County.

But optimism around Wolfspeed’s big semiconductor bet has been replaced by fears over its future. Softer demand for electric vehicles mixed with production delays at its Mohawk Valley facility and looming debt obligations have raised liquidity concerns. In November, Wolfspeed fired Lowe as its top executive. By then, one of Durham’s largest employers had already reduced its staff roughly 20% through layoffs, buyouts and attrition. In early March, it announced additional layoffs as one of several “aggressive steps to strengthen its balance sheet.”

Uncertainties surrounding the company’s outlook resurfaced late last week. Midday Friday, after its stock halved, Wolfspeed released a statement reiterating the belt-tightening steps it would take to strengthen its finances. The release also included news that Wolfspeed had received another $192.1 million in expected tax refunds through a provision of the federal CHIPS and Science Act.

But what happened last week to require this statement? One possibility involves a different portion of the CHIPS Act, the bipartisan bill passed in 2022 to support U.S. semiconductor production.

On Thursday morning, Wolfspeed named long-time semiconductor industry executive Robert Feurle its next CEO. During a press conference discussing the hiring, Wolfspeed board chair and interim CEO Thomas Werner also addressed the company’s prospective $750 million CHIPS Act award, which the Biden administration announced in October but did not finalize before leaving office.

In early March, President Donald Trump called the CHIPS program “a horrible, horrible thing” and advised U.S. House Speaker Mike Johnson to repurpose what money the office hadn’t already spent.

“I would say that it’s likely that the parameters of CHIP funding ... are likely to evolve some because the company has evolved, and because the CHIPS office is different,” Werner said Thursday.

Some saw the new CEO selection as evidence Wolfspeed won’t see the CHIPS dollars.

“We believe the timing of this appointment raises concerns about WOLF’s ability to have its $750M CHIPS Act grant awarded, especially given Feurle’s lack of CEO experience,” CRFA Research analyst Brooks Idlet wrote in a March 28 note, adding that losing this grant could necessitate “a major restructuring” at the Durham company.

In its statement Friday, Wolfspeed noted it continues “constructive dialogue with the White House” regarding domestic semiconductor production.

Another potential reason for Friday’s selloff involves reporting about the status of Wolfspeed’s debt, which is also linked to its CHIPS funding.

Under its preliminary CHIPS agreement with the Biden administration, Wolfspeed agreed to first restructure $575 million in convertible debt that it owes creditors on May 1, 2026. This is debt the company issued to help fund investments like its Mohawk Valley and Siler City factories.

Convertible bonds give holders the option to be paid back at a future date in company equity or cash with interest. Given Wolfspeed’s suppressed stock price, debt holders would likely elect for cash under the current arrangements.

“Wolfspeed continues to explore alternatives with regard to its convertible notes, in partnership with its advisors, and remains in a dialogue with lenders, including Apollo and Renesas,” the company said in its statement Friday.

But early that afternoon, Bloomberg cited “people with knowledge of the matter” who said Wolfspeed was struggling to refinance this debt. “Based on where the company’s stock is currently trading, a conversion to equity is unlikely unless that price reaches $47.32,” Bloomberg wrote.

“We cannot comment on speculation,” Wolfspeed head of investor relations Tyler Gronbach said in an email Friday.

Wolfspeed overall has issued more than $3 billion in convertible bonds in recent years and has future debt obligations of $750 million in 2028, $1.75 billion due in 2029, and $1.25 billion due in 2030.

On Monday, following its worst market day in history, Wolfspeed shares rebounded 18% to inch the company share price above $3. This still marked its lowest stock price since 1998.

While this is poor news for Wolfspeed shareholders, its good news for those who have made the company one of the market’s most-shorted stocks. And it some cases, the shorters and shareholders may actually be the same people as investment firms short stocks in companies they have lent money to as a hedge.

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Brian Gordon is the Business & Technology reporter for The News & Observer and The Herald-Sun. He writes about jobs, start-ups and all the big tech things transforming the Triangle. Brian previously worked as a senior statewide reporter for the USA Today Network. Please contact him via email, phone, or Signal at 919-861-1238.

Swiss pharmaceutical giant Novartis has exited one of its two state incentive deals for a gene therapies facility near Research Triangle Park. The North Carolina Economic Investment Committee on Tuesday canceled the company’s 2019 job development investment grant, which promised to create 200 jobs, upon Novartis’ request.

“Although Novartis will remain fully operational at the project location, the company does not expect enough growth to meet the headcount commitments for phase II (of the project),” Novartis Gene Therapies secretary Jaime Huertas wrote in a March 6 letter to the North Carolina Department of Commerce.

In May 2018, North Carolina awarded the Novartis gene therapy division (then called AveXis, later renamed Novartis Gene Therapies) an initial job development investment grant to build a new manufacturing center in south Durham. Through this first JDIG, which remains active, Novartis has created 198 jobs and invested $55 million at the 170,000-square-foot site off East Cornwallis Road.

Then in February 2019, North Carolina awarded Novartis a second incentive to hire another 200 workers and invest an additional $60 million at the Durham location. The company said the facility started this year with 308 employees and has achieved its investment commitments under both grants. Most JDIG recipients have not met their original hiring targets since North Carolina began the incentive program in 2003.

Novartis’ Durham facility produces Zolgensma, which treats spinal muscular atrophy, an inherited fatal disorder often referred to as SMA. In 2019, the Food and Drug Administration approved Zolgensma for children under the age of 2.

A few months later, the FDA announced Novartis had hidden manipulated data from the federal agency, though the government said the treatment was still safe. Novartis’ efforts to have Zolgensma approved for use in older patients were then slowed for years by clinical delays. In December, the shared a favorable study that suggests the treatment could be given to older patients.

According to the industry news outlet Fierce Pharma, the company intends to file its Zolgensma data with regulators in the first half of this year.

The FDA defines gene therapy as “a technique that modifies a person’s genes to treat or cure disease.” In recent decades, the Triangle has developed into a hub for gene therapy treatments, through research at Duke University and UNC-Chapel Hill’s Gene Therapy Center as well as in the local presence of companies like AskBio, Tune Therapeutics and Biogen.

As of Wednesday, Novartis was the 55th largest public company in the world with a market value above $200 billion.

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Tax Day is on Tuesday, April 15, but those who opted to file their taxes early are already getting their refunds.

Upgraded Points, a site that provides information on credit cards, reward programs and travel information, found that the average tax refund in North Carolina this year was $3,077 — the 26th-highest of any state.

The site used two data sources from the Internal Revenue Service (IRS) to find the average tax refund by state, county and income level: Filing Season Statistics and the Individual Income Tax Return (Form 1040).

Here’s how much the average tax refund was this year for North Carolina’s largest metro areas.

Note: All North Carolina taxpayers have until Thursday, May 1 to file and pay their federal and state taxes this year, though people who live in non-disaster counties will begin to accrue interest on April 15, The News & Observer previously reported.

All but three of North Carolina’s largest metro areas had average tax refunds higher than the state average, according to Upgraded Points.

Here is the average tax refund for the state’s 10 largest counties by population:

Yes. According to data from Upgraded Points, those with higher incomes are likely to receive higher refunds.

For example, the average refund for those in Mecklenburg County earning less than $50,000 per year was $2,466, but those who earned more than $200,000 had an average tax refund of $13,791.

However, the data also show that those with higher incomes are less likely to get refunds. Data show that 77.4% of people who earned less than $50,000 got refunds this year, while only 35% of those who earned more than $200,000 got refunds.

Not necessarily. Having extra money is hardly ever a bad thing, but a large refund means too much money was withheld from your paychecks throughout the year, “essentially providing the government with an interest-free loan,” Upgraded Points says.

To optimize your finances, Upgraded Points recommends adjusting your tax withholdings to better match your actual tax liability. You can use the IRS Tax Withholding Estimator Tool to estimate the federal income tax you want your employer to withhold from your paycheck.

Those who file online can check the status of their returns after 24 hours have passed from the file date. This can be done on the IRS2Go app or through the “Where’s My Refund?” tool on the IRS website. You can also check on the status of your state refund by going to The North Carolina Department of Revenue site (ncdor.gov) and clicking “Where’s My Refund?”

If it has been at least four weeks since you filed a paper return, you can check on the status of your refund by calling the IRS TeleTax System at 1-800-829-4477. You will be asked to provide the first Social Security number shown on the return, your filing status and the amount of the refund. If the IRS has processed your return, the system will tell you the date your refund will be sent.

President Trump signed an executive order in January that enacted a hiring freeze for federal employees, including those in the IRS, The Charlotte Observer reported. That means the IRS could be short-staffed during filing season. The agency expects more than 140 million individual tax returns to be filed over the next few months.

Trump signed another executive order that forced all federal employees who work remotely to return the office. This move could result in a wave of early retirements, Nina Olson, executive director of the Center for Taxpayer Rights, told the Journal of Accountancy.

“Many of the IRS employees who are retirement age and currently teleworking may just decide to retire and lock in their retirement benefits,” Olson said.

Some tax returns can take longer to process for many reasons, the IRS says, including when a return:

If more information is needed to process returns, the IRS will contact those taxpayers by mail.

Have a question about your community you’d like answered? Or maybe a tip or story idea you’d like to share? The service journalism teams at The News & Observer and The Charlotte Observer want to hear from you.

Despite creating hundreds of jobs in the state, a global pharma company is pulling out of its incentives deal with North Carolina.

State officials have terminated one of two incentive packages supporting a global pharmaceutical firm's operations in North Carolina.

The state's Economic Investment Committee on Tuesday terminated a Job Development Investment Grant (JDIG) awarded to Novartis (NYSE: AVS). Novartis, which requested to have the grant terminated, told the state it did not expect to meet its required employee numbers for the project.

The incentive packages relate to a gene therapy production facility Novartis operates in Durham. AveXis, a company that Novartis acquired and later renamed Novartis Gene Therapies, in 2018 selected Durham for a $55 million manufacturing facility. The company a year later announced an expansion of the facility, supported by an additional job development investment grant.

The first incentives package required Novartis to create 180 new jobs. As of last year, Novartis had met this goal, creating 198 jobs and retaining 86, according to a report the N.C. Department of Commerce published in September. This job development investment grant remains intact.

However, Novartis "does not expect enough growth to meet the headcount commitments" for the second incentives package, which calls for the company to create 180 additional jobs, according to a letter the company sent to the Department of Commerce.

In addition to terminating the second incentives package, the committee on Tuesday approved a motion to make Novartis ineligible for payments for grant year 2023 after the company did not meet its performance requirements.

The company has 308 employees and remains fully operational at the Durham site, according to its letter. Additionally, the company says it has met its financial investment requirements for both JDIG grants.

Novartis in 2022 received approval from the U.S. Food and Drug Administration to begin production at a 170,000-square-foot facility in Durham. The company uses the facility to manufacture its spinal muscular atrophy gene therapy, called Zolgensma.

Last year Novartis reported revenue from Zolgensma of $1.2 billion.

A longtime Durham charter school will stay open after having previously been ordered to close at the end of the school year.

The N.C. Charter Schools Review Board voted Monday to give a three-year renewal to the Community School of Digital and Visual Arts in return for a list of requirements the school’s leaders must meet. The Review Board had previously voted in January to not renew the school when its charter expires June 30.

“There’s just basic things you’ve got to do to earn the trust of the people around you,” Eric Sanchez, a member of the Review Board said Monday. “If this isn’t the big scare of your life, it should be.”

The renewal requirements include:

▪ Present a governance, academic and financial report to the Review Board at a minimum of once a year.

▪ Provide monthly meeting minutes of the school’s board of directors to the Office of Charter Schools.

▪ Submit the annual audit on time.

▪ All members of the Community School’s board will go through a minimum of two trainings a year and provide documentation in its annual report.

▪ Provide monthly updates to the Office of Charter Schools regarding the school’s potential move.

Charter schools are taxpayer-funded schools that are exempt from some of the rules that traditional public schools must follow. There are more than 200 charter schools open across North Carolina.

The Community School of Digital and Visual Arts is one of the state’s oldest charter schools. It opened in 1998 and was previously called Carter Community School.

The Community School is locally run, unlike some charter schools that have the resources of large for-profit companies to rely on.

Charter schools can be closed or can be renewed for between three and 10 years due to their academic, financial and governance performance.

The Review Board had cited issues such as the school not having financial audits for the 2022-23 and 2023-24 fiscal years and not posting full and accurate board minutes. The late audit reports have since been filed.

The Community School appealed the non-renewal to the State Board of Education, citing the school’s academic track record. The school exceeded academic growth expectations on state exams last school year and met growth targets the prior two years.

The state board voted in March to ask the Review Board to reconsider its non-renewal decision.

On Monday, Community School’s leaders presented a restructuring plan designed to address the Review Board’s concerns.

“Please don’t throw out the baby with the bath water,” Joe Battle, chair of the Community School’s board, told the Review Board. “But don’t lose sight of the good work that we’re doing and the hard-to-serve communities we’re reaching.”

Review board members accepted the plan but said it shouldn’t have take this long, especially for such a long-running charter school, to address the problems.

“Why did it take this process for attentions to be grabbed?” said Bruce Friend, chair of the Review Board. “I hope we don’t have to do this again, not just with this school but with any school.”

The News & Observer

919-829-4534

T. Keung Hui has covered K-12 education for the News & Observer since 1999, helping parents, students, school employees and the community understand the vital role education plays in North Carolina. His primary focus is Wake County, but he also covers statewide education issues.