Why Wolfspeed Stock Is Crashing Hard Today
Wolfspeed shares just got mauled—here's what's driving the brutal selloff.
Supply Chain Bites Back
Production delays and manufacturing snags hammered quarterly guidance. The silicon carbide specialist warned of longer lead times while rivals gain ground.
Market Spooks Easy
Investors dumped shares at the first sign of turbulence—typical Wall Street overreaction. Because why focus on long-term semiconductor trends when you can panic-trade on headlines?
EV Demand Jitters
Broader electric vehicle sector softness isn't helping. Wolfspeed's power chips face pressure as automakers tweak production targets.
Another 'growth story' learning that markets tolerate zero execution stumbles—especially when crypto's busy printing fresh all-time highs.
Image source: Getty Images.
Wolfspeed stock sinks as investors take profits on rally
Wolfspeed stock has seen big gains recently in conjunction with news that the company is poised to exit Chapter 11 bankruptcy protections in the NEAR future. The corporate restructuring will result in 70% of the company's debt being wiped out -- but it will also result in a major restructuring for the silicon-carbide specialist's stock.
Along with explosive gains for, some investors have been placing bets on other meme stock plays. This dynamic has helped power big gains for Wolfspeed's share price, but it's also not surprising to see big valuation pullbacks on the heels of recent rallies.
What's next for Wolfspeed?
Upon the completion of Wolfspeed's restructuring, current holders of the company's common stock will receive between 3% and 5% of the value of the new company. This sets up a very risky dynamic for current shareholders. While it's not impossible that current stockholders will come out ahead, the odds aren't necessarily favorable.
Recent gains connected to meme-stock trading could be further obscuring the outlook for some investors. Wolfspeed's restructuring will get rid of a large amount of debt by transferring asset and equity ownership to large debt holders, but the underlying business is still facing huge issues connected to weak demand and a negative gross margin.
