Wolfspeed Skyrocketed 20.07%—Is This a Meme-Stock Miracle or a Bankruptcy Warning?

Summary
• WOLF surged 20.07% to $1.705, trading as high as $2.05 and as low as $1.43
• Current price exceeds 52-week low of $0.3876 but remains far below 52-week high of $20.23
• Meme-trading frenzy and legal developments drive sharp intraday volatility

Wolfspeed’s stock exploded higher amid a perfect storm of speculative fervor and restructuring uncertainty. The semiconductor firm’s 20%+ rally defies its Chapter 11 status and 72% year-to-date decline, fueled by a surge in meme-trading activity and rumors of legal developments. With a 79% turnover rate and 52-week range of $0.3876–$20.23, the stock’s trajectory remains a high-risk, high-reward proposition.

Meme-Stock Momentum Meets Bankruptcy Uncertainty
Wolfspeed’s 20.07% intraday surge was driven by a confluence of speculative demand and legal speculation. The stock’s sharp move coincided with a Bloomberg Law report on a class-action lawsuit seeking to nullify liability shields for former executives. While no fundamental news directly justified the rally, the kDJ golden cross technical signal attracted algorithmic and retail traders. The stock’s Chapter 11 restructuring—where current shareholders will retain only 3–5% of the new entity’s value—adds existential risk, making the rally more a short-term momentum trade than a value play.

Options Playbook: Leverage the Bullish Momentum
• 200-day average: $5.79 (far above current price)
• RSI: 58.79 (neutral, not overbought)
• MACD: -0.0007 (bearish), Signal Line: -0.0405

Wolfspeed’s technicals show a short-term bearish trend with a neutral RSI, but the intraday surge has attracted high-conviction options buyers. Two top picks from the chain:

• WOLF20251017C1.5 (Call):
- Strike: $1.50
- Expiry: 2025-10-17
- IV: 196.52% (extreme volatility)
- LVR: 2.43% (high leverage)
- Delta: 0.733 (high sensitivity)
- Theta: -0.00336 (moderate time decay)
- Gamma: 0.2017 (high sensitivity to price swings)
- Turnover: $5,221
- Why: High delta and gamma suggest strong directional potential if the rally continues.
• WOLF20251121C2 (Call):
- Strike: $2.00
- Expiry: 2025-11-21
- IV: 191.37% (high volatility)
- LVR: 3.21% (very high leverage)
- Delta: 0.6196 (moderate sensitivity)
- Theta: -0.00374 (moderate decay)
- Gamma: 0.2398 (high sensitivity)
- Turnover: $357,548
- Why: High leverage and liquidity make this ideal for aggressive bulls expecting a post-bankruptcy bounce.
Payoff Estimate (5% upside to $1.79):

• WOLF20251017C1.5: $0.29 profit (186% return)

• WOLF20251121C2: $0.29 profit (145% return)

Aggressive bulls should consider WOLF20251121C2 into a break above $1.80.

Backtest Wolfspeed Stock Performance
The backtest of WOLF's performance after a 20% intraday surge shows mixed results. While the stock experienced a positive change initially, the overall trend over the 3-day, 10-day, and 30-day periods was negative, with the highest return being -6.91% over 30 days. This suggests that while the stock may have had a short-term positive reaction to the surge, it ultimately declined further, indicating a potential lack of sustained upward momentum.

Bankruptcy Clock Ticks—Act Fast or Watch the Delisting
Wolfspeed’s rally is a high-stakes gamble against its Chapter 11 restructuring and delisting risks. While the kDJ golden cross and meme-trading frenzy suggest short-term momentum, the stock’s 52-week low of $0.3876 and 21.15 debt-to-equity ratio underscore its fragility. Investors should monitor the $1.50 support level and $2.00 psychological resistance. For now, Intel (INTC, +0.75%) remains the semiconductors sector’s stable leader. If $1.50 breaks, exit longs immediately—this is a race against bankruptcy, not a bull market.