Why Is Wolfspeed Stock Plummeting Today?

Core Viewpoint - Wolfspeed's stock is experiencing a significant decline due to recent restructuring and stock dilution, impacting investor sentiment and stock value [1][2][4] Group 1: Stock Performance - Shares of Wolfspeed are down 12.1% as of 1:35 p.m. E.T., contrasting with modest gains in the S&P 500 and Nasdaq Composite [1] - The stock is falling as investors begin to understand the implications of the company's restructuring [2] Group 2: Restructuring and Dilution - Wolfspeed has exited Chapter 11 protection after restructuring, but this has led to severe dilution for common stockholders to satisfy creditors [2] - The company canceled all existing shares and issued new stock, with previous shareholders receiving approximately one share for every 120 shares they owned [3] Group 3: Investor Caution - Many investors were unaware of the dilution risks, leading to purchases at what appeared to be low prices [4] - Wolfspeed has indicated that equity holders may experience significant losses on their investments, highlighting the importance of understanding the fine print in such situations [4]