Jul. 9, 2025 at 12:05 PM ET5 min read

Wolfspeed Faces Financial Turbulence With Chapter 11 Bankruptcy

Tim BohenAvatar
Written by Tim Bohen Reviewed by Ben Sturgill Fact-checked by Ellis Hobbs

Wolfspeed Inc.’s stocks have been trading down by -14.62 percent amid mounting challenges in securing vital semiconductor supply chains.

Key Takeaways

  • Shares dropped nearly 16% as Wolfspeed prepped to file for Chapter 11 bankruptcy, reflecting investor anxiety.
  • A restructuring plan was announced to help cut debt, but news of bankruptcy filing weighed heavily on stock value.
  • Apollo Global Management to assume control in a strategic move, signaling significant shifts in company’s management.
  • Wolfspeed stock removed from S&P SmallCap 600; a stark indicator of company’s current challenges.

Candlestick Chart

Live Update At 12:04:14 EST: On Wednesday, July 09, 2025 Wolfspeed Inc. stock [NYSE: WOLF] is trending down by -14.62%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Financial Overview

Wolfspeed has been navigating choppy waters as its financial health takes a nosedive. With a recent quarterly revenue of about $807M, the numbers appear starkly contrasted by massive losses. Depicting a bleak scene, the company recorded an EBITDA of -$131M, alongside negative free cash flow of approximately $364M for the reported period.

A deeper dive shows Wolfspeed saddled with a heavy debt burden of nearly $6.52B, challenging its financial flexibility. Several financial metrics paint a troubling picture: a negative ebitda margin of 161.3%, negative EBIT of $200M, and a substantial pre-tax loss amplified by high interest expenses.

More Breaking News

What stands out is the company’s ambitious restructuring plan aimed at slashing an estimated $4.6B of debt. The restructuring support agreement could be a lifeline in reducing interest payments, yet the specter of bankruptcy largely overshadows these moves.

Market Reactions

Investors have reacted with a notable lack of confidence, notably impacting stock prices. The pending Chapter 11 filing spurred significant sell-offs, contributing to a precipitous share price drop by over 16%. Such a sharp downturn underscores the market’s skepticism about Wolfspeed’s ability to navigate its financial quagmire successfully.

The news that Apollo Global Management will steer Wolfspeed into a more expedited bankruptcy process marks a decisive shift in control — one that could have significant long-term implications for the company’s trajectory.

Removing Wolfspeed from the S&P SmallCap 600 is symbolic, highlighting the struggles it faces amidst its ongoing financial turbulence. This delisting could impact Wolfspeed’s market exposure and add an extra layer of complexity to its revival efforts.

Conclusion

Wolfspeed’s current financial standing presents a challenging scenario with high risks and limited immediate remedies. The effort to restructure debt, while positive on the surface, falls under the looming shadow of bankruptcy proceedings.

The significant stock decline conveys traders’ panic, reflecting concerns over the company’s rapidly changing landscape. Although the restructuring plan aims to cut substantial debt, whether this move will be enough to rebuild confidence and ensure long-term sustainability remains uncertain. As Tim Bohen, lead trainer with StocksToTrade says, “For me, trading is more about managing risk than finding the next big mover.” This sentiment resonates as Wolfspeed navigates its current turmoil, prioritizing risk management in its restructuring strategy.

As Wolfspeed maneuvers through these volatile financial waters, both traders and stakeholders will keenly observe its strategic pivots, eager for signs of turnaround and renewed market confidence. Whether it emerges stronger or succumbs to further turmoil will depend largely on its execution of ongoing restructuring and adjustment strategies.

This is stock news, not investment advice. StocksToTrade News delivers real-time stock market updates tailored to highlight the key catalysts driving short-term price movements. Our coverage is designed for active traders and investors who thrive in fast-moving markets, with a focus on volatile sectors like penny stocks, AI stocks, Robinhood stocks and other momentum plays. From earnings reports and FDA approvals to mergers, new contracts, and unusual trading volume, we break down the events that can spark significant price action.

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