Wolfspeed’s Stock Volatility Continues Pre-Market : What is The Latest

Wolfspeed Inc. (NYSE: WOLF), the Durham-based silicon carbide semiconductor manufacturer, is facing its most perilous chapter yet as numerous reports swirl of an imminent bankruptcy filing. Once a darling of the chip industry with shares peaking at $140 in 2021, Wolfspeed’s stock has been in freefall, closing at $1.71 yesterday, a staggering collapse that underscores the gravity of the company’s financial crisis.

Despite what was a sharp drop of 59% on Wednesday, as the reports first surfaced, yesterday's session saw some renewed impetus in buying activity, with WOLF gaining 33% on the day. This leaves the stock 45% below Tuesday's closing price, and 93% down over the past 12 months. In early pre-market trading, evidence of a bounce remains, with a further 12.87% in gains at the latest look.

At the heart of Wolfspeed’s crisis is a crushing debt load of ~$6.5 billion, much of it incurred during an ambitious expansion drive that saw the company building new manufacturing facilities in New York and North Carolina. As of March 31, 2025, Wolfspeed reported $1.3 billion in cash on hand, but this buffer appears insufficient given the looming $575 million balloon payment on convertible notes due in May 2026, with further maturities in 2028 and 2029.

Despite rejecting several out-of-court restructuring proposals, Wolfspeed is reportedly pursuing a prepackaged Chapter 11 filing backed by a majority of its creditors. Apollo Global, holding $1.5 billion in senior secured loans, is leading these negotiations and would be first in line for repayment in bankruptcy, further diminishing the prospects for equity holders.

Wolfspeed’s woes are not limited to its capital structure. The company is grappling with sluggish demand in key end markets, particularly the automotive and industrial sectors, and has been hit by tariff uncertainties and weakening sales for its 150mm wafers. Earlier this month, Wolfspeed flagged “going-concern” doubts and slashed its 2026 revenue outlook to $850 million, well below Wall Street expectations.

Efforts to shore up liquidity have included putting its Dallas-area site up for sale and suspending construction of a device fab in Saarland, Germany. Meanwhile, a much-anticipated $750 million in CHIPS Act funding remains out of reach, as the government made disbursement contingent on Wolfspeed refinancing its near-term convertible debt, a requirement the company has been unable to meet.

Wolfspeed’s leadership has acknowledged the gravity of the situation, stating that “optimizing our capital structure has been a stated priority” and that the company is “evaluating a number of potential alternatives,” including an in-court solution. However, the path to recovery appears vanishingly narrow, with creditors and management at loggerheads over restructuring terms and no clear route to avoid bankruptcy.

Whilst bulls may be looking for a positive catalyst in the near-term, or hopes of the reports being false; the current combination of a collapsing stock price, unsustainable debt, operational headwinds, and even the potential of a Chapter 11 filing leaves little room for optimism according to the bears. There is certainly plenty of back and forth in recent days, and we can expect further volatility in the days ahead as things play out.