1. Wolfspeed's stock plummeted 69% amid bankruptcy fears. 2. Company is preparing a Chapter 11 plan supported by creditors. 3. Wolfspeed holds $6.5 billion in debt, with $1.3 billion cash. 4. It is the most-shorted U.S.-listed stock by percentage. 5. Shares dropped 53% this year due to financial stability concerns.
The imminent bankruptcy threat and significant debt complicate outlook, similar to past bankruptcies in tech. A precedent can be seen with companies like Enron, where bankruptcy led to dramatic stock declines.
The potential bankruptcy directly threatens WOLF's viability, impacting investor sentiment drastically. This is a critical financial situation that will almost certainly affect future trading.
The bankruptcy news will likely have an immediate effect on stock performance, as investors react quickly to financial distress signals.