Wolfspeed (WOLF) Is Down 45.7% After Chapter 11 Restructuring Wipes Out Shareholder Equity

Simply Wall St
  • In recent days, Wolfspeed announced plans to shift its incorporation from North Carolina to Delaware as part of ongoing Chapter 11 bankruptcy restructuring, following court approval of its reorganization plan to cut outstanding debt by about 70%.
  • This restructuring will result in the elimination of existing shareholder equity, offering prior shareholders only a small portion of the new stock, raising considerable uncertainty about Wolfspeed’s future ownership and capitalization structure.
  • We will explore how Wolfspeed’s restructuring under Chapter 11 and move to Delaware influences its investment outlook and risk profile.

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Wolfspeed Investment Narrative Recap

To be a shareholder in Wolfspeed today, you would need conviction in the company’s ability to recover from bankruptcy and reposition its silicon carbide technology for long-term growth in electric vehicles and renewables. The just-approved Chapter 11 restructuring and planned move to Delaware do little to reduce near-term risks, especially as current shareholders face sizable dilution and Wolfspeed’s debt reduction, while material, does not immediately resolve profitability or cash flow concerns.

Among Wolfspeed’s latest announcements, the commercial launch of its 200mm silicon carbide materials stands out. While this represents progress on a key technology catalyst, the benefits may be overshadowed in the short term by financial restructuring and the uncertainty surrounding the company’s path to positive free cash flow and ongoing operational challenges.

However, with these structural changes taking place, one risk that investors cannot afford to ignore is...

Read the full narrative on Wolfspeed (it's free!)

Wolfspeed's outlook anticipates $1.1 billion in revenue and $160.2 million in earnings by 2028. Achieving this would require a 14.4% annual revenue growth rate and an increase in earnings of about $1.76 billion from current earnings of -$1.6 billion.

Uncover how Wolfspeed's forecasts yield a $3.17 fair value, a 162% upside to its current price.

Exploring Other Perspectives

WOLF Community Fair Values as at Sep 2025

Simply Wall St Community members submitted 18 fair value estimates for Wolfspeed, spanning US$3.17 to US$29 per share. Against this broad spectrum, Wolfspeed’s uphill effort to achieve positive free cash flow remains a major theme shaping future outcomes.

Explore 18 other fair value estimates on Wolfspeed - why the stock might be worth just $3.17!

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Valuation is complex, but we're here to simplify it.

Discover if Wolfspeed might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

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