Wolfspeed surges 150% as the embattled chipmaker files for bankruptcy
The company says it aims to cut 70% of its debt while keeping operations running as usual.
Wolfspeed’s beaten-down shares more than doubled Tuesday morning after the chipmaker filed for Chapter 11 bankruptcy, marking a major move to restructure its hefty debt load amid weakening demand.
The North Carolina-based company specializes in silicon carbide and gallium nitride chips used across electric vehicles, renewable energy, aerospace, and industrial tech.
Earlier this month, Wolfspeed locked in a restructuring agreement with creditors and Renesas Electronics’ US subsidiary, unlocking $275 million in financing. The company, which had $1.3 billion in cash as of Q3, expects to emerge from bankruptcy by the end of the current quarter.
Wolfspeed plans to slash its total debt by roughly 70% (or nearly $4.6 billion) and cut its annual interest payments by about 60%. The company said in a statement that it will be “continuing to operate as usual throughout the process,” including delivering materials and paying vendors during the restructuring.
Wolfspeed shares, which topped out at about $140 a share in late 2021, are trading right around $1 now. Even with Tuesday’s run-up, they’re down about 84% year to date.
