Bankruptcy Court Approves Wolfspeed Plan, Stock Surges Over 50%

Wolfspeed's stock surged between 42% and over 60% after a U.S. court approved its Plan of Reorganization, clearing the way for the company to exit Chapter 11 bankruptcy within weeks. The approved plan will reduce Wolfspeed's debt by approximately 70%, eliminating about $4.6 billion of its $6.5 billion total debt, and cut annual interest costs by around 60%, while providing $275 million in new financing. This financial restructuring enables Wolfspeed to refocus on product innovation and growth, particularly in silicon carbide technology, which is critical for electric vehicles and renewable energy systems. Despite the recent stock gains, Wolfspeed’s shares remain down about 73% for the year, with a consensus analyst rating of moderate sell or hold and a wide range of price targets reflecting market uncertainty. Some projections suggest significant upside potential over the next year, with average price targets indicating a possible increase of over 350%, and GuruFocus estimating even higher fair value based on historical and future performance. CEO Robert Feurle called the court approval an important milestone that moves the company toward financial stability and growth after a period of heavy spending and restructuring.