Key Takeaways
- Wolfspeed reportedly is considering filing for bankruptcy within weeks as it struggles with mounting debt.
- The Wall Street Journal noted that the silicone carbide chipmaker has turned down several plans by creditors to restructure its debt.
- The news sent Wolfspeed shares to an all-time low.
Wolfspeed (WOLF) shares cratered Wednesday, a day after a report that the struggling silicone carbide chip manufacturer would be filing for bankruptcy “within weeks.”
The Wall Street Journal reported Tuesday afternoon that after the company rejected several proposals by creditors to restructure its debt, Wolfspeed was looking at a plan to use Chapter 11 bankruptcy in a way that’s acceptable to a majority of debtholders.
The company has been under financial pressure for months, and that was exacerbated in March when outgoing executive chair Tom Warner warned Wolfspeed may lose out on $750 million in grants and $1 billion in tax credits it had been expecting under the CHIPS and Science Act of 2022. In addition, this month the company posted disappointing results and added two board members to assist in dealing with the debt.
Investopedia has reached out to Wolfspeed for comment but has not received a response.
The news sent Wolfspeed shares to an all-time low Wednesday morning, and they’re now trading at less than $1 each.
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