Wolfspeed shares surge 1,100% after bankruptcy update and debt cut plan

Wolfspeed Inc (WOLF) shares jumped on Monday afternoon after the company announced a reorganization plan, where shareholders will receive new substituted common stock. The stock went up as much as 1,450% after the news of its Chapter 11 restructuring and corporate changes.

The company’s court-approved plan will cut its debt by 70%, bringing it down from $6.5 billion to $2 billion. It will also reduce interest payments by about 60%. As part of this restructuring, Wolfspeed will move its legal base from North Carolina to Delaware, as reported by Benzinga.

Wolfspeed stock news today

On Monday, the New York Stock Exchange stopped trading the old Wolfspeed common stock. The old stock is scheduled to be delisted on October 10. Shareholders will get new common stock in the reorganized company. But because of dilution, current shareholders will only receive 3-5% of the new equity, while creditors will own the majority.


The big debt cut news led to speculative trading, and this sudden interest caused the stock price to surge. There were also several trading halts on Monday morning before the rise. At the time of publication on Monday, Wolfspeed shares were up about 1,137%, trading at $14.97, as stated by Benzinga report.

How to buy Wolfspeed shares

Investors who want to buy Wolfspeed stock can do so through a brokerage account. Many platforms allow people to buy fractional shares, meaning they can own part of a share instead of buying a full one.

Investors who want to bet against Wolfspeed have to take a more complex path. They need an options trading platform or a broker who lets them short the stock by lending shares to sell. Another way is to buy a put option or sell a call option at a higher strike price. Both methods let traders profit if the stock price goes down, as per the report by Benzinga.

FAQs

Q1. Why did Wolfspeed stock jump so much?

Wolfspeed stock jumped over 1,000% because of its Chapter 11 reorganization plan that cuts debt by 70% and gives shareholders new stock.

Q2. What will happen to old Wolfspeed shares?

The old Wolfspeed shares will be delisted on October 10, and shareholders will get new common stock but only 3-5% of the company equity.