Shareholder Wipeout: Wolfspeed’s Restructuring Plan Obliterates Equity Value

Wolfspeed shares are experiencing a catastrophic decline following the court’s approval of its Chapter 11 reorganization strategy. The company’s emergence from bankruptcy protection comes at a devastating cost to current investors, whose holdings are being massively diluted. Market prices now fully reflect the reality that existing shareholders will be left with a minimal stake in the reorganized entity.

The primary driver behind the stock’s collapse is the sanctioned plan that effectively nullifies the value of current common shares. Under the court-approved terms, existing equity holders are slated to receive only 3% to 5% of the new company. This near-total evaporation of shareholder value has triggered violent selling pressure, with the stock posting single-day losses exceeding 30%.

A clear downward... Read more...