By Katherine Hamilton
Shares of Charles & Colvard rallied in post-market trading after the company said Wednesday it received an interim award limiting what it owes Wolfspeed in damages during an arbitration battle.
The jewelry company's stock rose 35% to $2.15 in late trading. Through the close of market trading shares have fallen 62% this year.
Arbitrators reduced Charles & Colvard's liability to about $3.3 million. Wolfspeed was originally seeking $28 million in damages.
The dispute stems from a contract in 2023, which Wolfspeed says Charles & Colvard breached. Wolfspeed, a long-time crystal supplier to Charles & Colvard, alleges the jewelry company failed to satisfy several purchase obligations. That includes $3.3 million of silicon carbide crystals that Wolfspeed delivered, according to a Charles & Colvard filing in May to the Securities and Exchange Commission.
The $3.3 million liability includes $1.3 million for inventory previously purchased and $2 million of consigned inventory in already in its possession, Charles & Colvard said. It will be recorded on the company's balance sheet as of June 30, 2024.
Charles & Colvard is also required to pay an interest rate of 8% per year on the foregoing compensatory damages starting on April 24, 2023 and until the damages are fully paid.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
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December 11, 2024 17:54 ET (22:54 GMT)
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