Form 4: Citigroup Reports Wolfspeed Trades, Agrees to Disgorge Profits

Citigroup Inc., a 10% owner of Wolfspeed, Inc., reported recent purchases and sales of common stock and equity swaps, agreeing to disgorge Section 16(b) profits due to an administrative error.

Summary

• Citigroup Inc. (the "Reporting Person"), a 10% owner of Wolfspeed, Inc. ("WOLF"), filed a Form 4 reporting changes in beneficial ownership.
• On October 30, 2025, the Reporting Person purchased 116,002 shares of WOLF common stock at a weighted average price of $26.12 per share.
• On October 31, 2025, the Reporting Person purchased an additional 24,773 shares at $26.67 per share and 53,530 shares at $27.46 per share.
• Also on October 31, 2025, the Reporting Person sold 194,423 shares of WOLF common stock at a weighted average price of $26.18 per share.
• Following these transactions, the Reporting Person indirectly beneficially owned 2,585,507 shares of WOLF common stock.
• Citibank, N.A. (CBNA), a subsidiary of Citigroup, entered into two cash-settled total return swaps on October 30, 2025, with final valuation dates of June 24, 2026.
• These swaps involve an obligation to sell 883,924 shares and 116,076 shares of common stock, respectively, from an initial price of $26.12 per share.
• The Reporting Person has agreed to disgorge all statutory "profits" pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, that resulted from these transactions.
• The transactions were reported late due to an inadvertent administrative error.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the explicit mention of a Section 16(b) violation requiring disgorgement of profits and the late filing attributed to an administrative error, indicating compliance and operational issues for the reporting entity.

Negatives

• Citigroup Inc. was required to disgorge statutory "profits" under Section 16(b) of the Securities Exchange Act of 1934, indicating a violation of short-swing profit rules.
• The transactions were reported late due to an inadvertent administrative error, suggesting internal compliance or reporting deficiencies.

Risks

• Potential for reputational damage for both Citigroup and Wolfspeed due to the Section 16(b) violation and late filing by a significant shareholder.
• Increased scrutiny from regulatory bodies regarding compliance with Section 16(b) and timely reporting requirements.
• The administrative error leading to late filing and disgorgement highlights operational risks within Citigroup's compliance framework.

Future Outlook

This filing does not contain any forward-looking statements or guidance regarding Wolfspeed's operational or financial performance. It solely reports past transactions and compliance matters of a 10% owner.

Industry Context

This filing primarily concerns the trading activity and regulatory compliance of a major financial institution (Citigroup) as a significant shareholder in a semiconductor company (Wolfspeed). It does not provide insights into broader industry trends for semiconductors or financial services, beyond highlighting the importance of regulatory adherence for large institutional investors.

Legal Proceedings

• Citigroup Inc. has agreed to disgorge statutory "profits" to Wolfspeed, Inc. pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, which addresses short-swing profits by insiders.

Stakeholder Impact

• Shareholders of Wolfspeed, Inc. may view the Section 16(b) violation and late filing by a 10% owner negatively, potentially raising concerns about the overall compliance environment or the reliability of reporting from significant investors.
• Regulatory bodies will note the Section 16(b) violation and late filing, potentially leading to increased scrutiny of Citigroup's compliance procedures.

Next Steps

• Citigroup Inc. will disgorge all statutory "profits" to Wolfspeed, Inc. pursuant to Section 16(b).

Key Dates

Keywords

Wolfspeed, WOLF, Citigroup, SEC Form 4, beneficial ownership, stock trades, equity swap, Section 16(b), insider trading, financial services, semiconductors