Wolfspeed Stock: Can It Recover?
Wolfspeed (NYSE: WOLF) was trading around $0.97 per share at 10 a.m. Wednesday. Shares had dropped 69% from Tuesday's close after a Wall Street Journal report Tuesday evening that the company is considering filing a "prepackaged" Chapter 11 bankruptcy plan. Shares of the semiconductor company are down roughly 96% over the past year.The company in May noted a "going concern warning" in its quarterly filing. That means its auditor expressed substantial doubt that the company would be able to continue to operate over the next year, and it could go bankrupt. That rattled investors, as did the Wall Street Journal report, but it does not necessarily mean the end is near for the company. For example, online used car company Carvana issued a "going concern warning" back in 2020, only to see its stock skyrocket from $30 (split-adjusted) to over $300 at one point this year. One of the big catalysts for Carvana was its debtors restructuring its debt, which is something Wolfspeed's management is currently looking to do.The Wall Street Journal reported on Tuesday after markets closed that the company is considering filing a prepackaged Chapter 11 bankruptcy plan, which is a streamlined bankruptcy process where a company negotiates a plan of reorganization with its creditors before filing for bankruptcy protection. Wolfspeed management has already rejected several out-of-court debt restructuring proposals from its creditors, according to the report.Continue reading
Wolfspeed (NYSE: WOLF) was trading around $0.97 per share at 10 a.m. Wednesday. Shares had dropped 69% from Tuesday's close after a Wall Street Journal report Tuesday evening that the company is considering filing a "prepackaged" Chapter 11 bankruptcy plan. Shares of the semiconductor company are down roughly 96% over the past year.
The company in May noted a "going concern warning" in its quarterly filing. That means its auditor expressed substantial doubt that the company would be able to continue to operate over the next year, and it could go bankrupt. That rattled investors, as did the Wall Street Journal report, but it does not necessarily mean the end is near for the company. For example, online used car company Carvana issued a "going concern warning" back in 2020, only to see its stock skyrocket from $30 (split-adjusted) to over $300 at one point this year. One of the big catalysts for Carvana was its debtors restructuring its debt, which is something Wolfspeed's management is currently looking to do.
The Wall Street Journal reported on Tuesday after markets closed that the company is considering filing a prepackaged Chapter 11 bankruptcy plan, which is a streamlined bankruptcy process where a company negotiates a plan of reorganization with its creditors before filing for bankruptcy protection. Wolfspeed management has already rejected several out-of-court debt restructuring proposals from its creditors, according to the report.
