Wolfspeed (WOLF) stock is up nearly 100% in pre-market trading today after the company filed for Chapter 11 and announced a major restructuring plan to cut its debt and fix its finances. The chipmaker, which makes silicon carbide chips for electric cars and other machines, said it will reduce its $6.5 billion debt by about 70%—or $4.6 billion—and lower yearly interest costs by 60%.
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As part of the restructuring, the company has reached a deal with its lenders and Renesas Electronics’ U.S. unit. The deal gives Wolfspeed $275 million in new funds to help keep the business running during the process. The move comes amid weakening demand and growing uncertainty around trade policies.
Business to Continue During Reorganization
Wolfspeed emphasized that it will continue operating normally during the process — delivering products, paying vendors, and serving customers without disruption. It expects to emerge from bankruptcy by the end of the current quarter.
The bankruptcy move follows Wolfspeed’s warning in May about its ability to stay afloat, as rising costs, weaker EV demand, and shifting U.S. trade policy squeezed its balance sheet. As of March 31, 2025, the company had roughly $6.5 billion in debt, while its cash and cash equivalents balance stood at only $1.3 billion.
To help steer the company back to profitability, Wolfspeed recently named former executive vice president David Emerson as chief operating officer. His focus will be on improving margins and boosting efficiency.
While shareholders may face dilution as part of the reorganization, the sharp post-market rally shows that investors see the restructuring as a bold step toward long-term recovery.
Is Wolfspeed a Good Stock to Invest In?
On TipRanks, WOLF stock has a Hold consensus rating based on three Buys, two Holds, and four Sell ratings. Also, the average Wolfspeed price target of $4.13 implies 935.61% upside potential from current levels. Meanwhile, the stock has lost 94% so far this year.
