Following the Wall Street Journal’s allegation that the semiconductor company is getting ready to file for bankruptcy, Wolfspeed’s (NYSE:WOLF) stock fell 40% during post-market trade on Tuesday.
By the time the bell rang, the stock had already fallen 10%, and it fell another 40% after that.
According to the article, which cited people familiar with the situation, the Durham-based business intends to declare bankruptcy sometime in the coming weeks. Wolfspeed owes about $6.5 billion.
In an attempt to prevent bankruptcy, Wolfspeed was evaluating a potential debt restructuring plan earlier this month, and talks were underway with a number of junior creditors and other investors to provide rescue finance. That seems to have fallen through lately.
The U.S. CHIPS and Science Act was to provide $750 million to Wolfspeed as recently as October 2024. Additionally, an investment group consisting of Apollo, The Baupost Group, Fidelity Management & Research Company, and the Capital Group was to provide an extra $750 million. Over the following few years, it also anticipated receiving an additional $1 billion in tax returns.
One of the biggest manufacturers of silicon carbide technology in the world, Wolfspeed is utilised in battery storage, artificial intelligence data centres, electric cars, and other applications.
