Wolfspeed Reportedly Nears Bankruptcy Filing Within Weeks

• Wolfspeed Inc. (WOLF) shares dropped 58.47% to $1.30 in after-hours trading as the company prepares to file for Chapter 11 bankruptcy within weeks, burdened by significant debt.
• After rejecting out-of-court debt restructuring, Wolfspeed is pursuing a creditor-supported Chapter 11 plan, reflecting broader financial challenges in the semiconductor industry.

Wolfspeed Inc. (WOLF) faces a precarious financial future as its shares plummeted 58.47% to $1.30 in after-hours trading on Tuesday, following a Wall Street Journal report indicating the semiconductor supplier is preparing to file for Chapter 11 bankruptcy within weeks. The Durham, NC-based company, a key player in silicon carbide technology critical for electric vehicles and renewable energy applications, is grappling with a substantial debt burden that has overwhelmed its balance sheet. After rejecting multiple out-of-court debt restructuring proposals, Wolfspeed is now pursuing a Chapter 11 plan with the backing of most creditors, aiming to reorganize and address its financial obligations. The company’s struggles reflect broader challenges in the semiconductor industry, where high capital expenditures and market volatility can strain even established firms. Wolfspeed’s recent operational shifts, including the closure of its 150-millimeter Durham facility and expansion into new plants in New York and Siler City, North Carolina, have not alleviated its financial distress. With a market capitalization now at $543.14 million and a stock price far below its 52-week high of $30.86, Wolfspeed’s bankruptcy filing could reshape its trajectory in the competitive silicon carbide market.

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