Wolfspeed (WOLF) Shares Plunge 16.55% After Bankruptcy Exit as Restructuring Sparks Investor Jitters

Wolfspeed (WOLF) shares plummeted 16.55% on September 17, 2025, hitting an intraday low of 18.92% below previous levels—the lowest since September 2025. This sharp decline follows the company’s recent emergence from Chapter 11 bankruptcy, as the court-approved reorganization plan reshapes its capital structure and debt obligations. Despite the restructuring’s completion, lingering operational and market risks continue to weigh on investor sentiment.

The reorganization, finalized on September 8, 2025, slashed Wolfspeed’s total debt by 70% and reduced annual interest payments by 60%, freeing capital for R&D and production in the silicon carbide (SiC) semiconductor sector. However, the plan also diluted existing equity holders to 3-5% of new common shares, raising concerns about long-term ownership value. While creditors overwhelmingly supported the restructuring, the stock’s volatility underscores market skepticism about the company’s ability to execute its strategic priorities, including scaling production and maintaining technological leadership.

Wolfspeed’s core business in SiC semiconductors positions it to benefit from growing demand in electric vehicles, renewable energy, and industrial power systems. The company’s expanded Marcy, New York, fabrication facility, funded by $2.5 billion in public and private investments, is critical to meeting rising demand. Yet persistent challenges, such as low yields in 8-inch wafer production and intense competition from Chinese manufacturers, threaten its market share. These operational hurdles highlight the delicate balance between capital efficiency and innovation required to sustain growth.

Investor optimism has been tempered by execution risks. CEO Robert Fuerle emphasized the reorganization’s role in strengthening Wolfspeed’s financial flexibility, but the company must now demonstrate progress in production scaling and customer retention. Analysts note that the stock’s depressed valuation offers potential upside if Wolfspeed navigates these challenges successfully. However, the path to profitability remains uncertain, with equity dilution and competitive pressures posing ongoing threats. The coming weeks will test the company’s ability to translate its restructured balance sheet into tangible operational and market gains.