Wolfspeed Stock Surges Amid Debt Restructuring and EV Market Challenges
Wolfspeed shares soared 5.8% on Tuesday, defying broader market declines as the S&P 500 and Nasdaq dipped 0.4% and 0.6% respectively. The rally extends a 115% weekly surge fueled by progress in the chipmaker's Chapter 11 bankruptcy exit plan.
A bankruptcy court approved Wolfspeed's proposal to slash $4.6 billion in debt, representing a 70% reduction in total liabilities and 60% cut to annual interest expenses. With overwhelming creditor support, the company expects to complete restructuring within weeks.
While the balance sheet overhaul provides relief, Wolfspeed faces headwinds in its Core electric vehicle market. The company's power-efficient chips once benefited from booming EV demand, but slowing sales growth now clouds the recovery narrative.
