Why Is Wolfspeed Stock Jumping This Week?

Core Viewpoint - Wolfspeed is experiencing significant stock volatility, with shares fluctuating after a substantial gain last week, as investors assess the company's value post-bankruptcy [1]. Group 1: Bankruptcy and Debt Restructuring - Wolfspeed is expected to exit Chapter 11 bankruptcy within weeks, having received court approval to reduce its debt by $4.6 billion, which represents a 70% reduction in total debt and a 60% decrease in annual interest expenses [2]. - The bankruptcy reorganization will lead to the elimination of existing stock and the issuance of new shares, with only 3% to 5% of the new shares allocated to current common stockholders, while the majority will go to holders of convertible debt notes [4]. Group 2: Market Challenges - Despite the reduction in debt, Wolfspeed still faces challenges in its target market of electric vehicles, which is currently experiencing its own set of problems [5].