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Wolfspeed Faces Uncertain Future as Bankruptcy Looms

Ellis HobbsAvatar
Written by Ellis Hobbs Reviewed by Jack Kellogg Fact-checked by Tim Sykes
Updated 7/9/2025, 11:32 am ET 5 min read
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On Monday, Wolfspeed Inc.’s stocks have been trading down by -15.05 percent amid electric vehicle chip supply challenges.

Key Takeaways:

  • An agreement to reduce debt has led to plans for a Chapter 11 bankruptcy filing, contributing to a 16% drop in stock value.
  • Apollo Global Management is set to take control of Wolfspeed, further weighing down shares by 32%.
  • The removal from the S&P SmallCap 600 index due to the impending bankruptcy filing adds to the company’s challenges.

Candlestick Chart

Live Update At 11:32:25 EST: On Wednesday, July 09, 2025 Wolfspeed Inc. stock [NYSE: WOLF] is trending down by -15.05%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Financial Overview:

Wolfspeed Inc. is in a challenging position with the recent earnings reflecting significant struggles. As of the latest available data, the company reported a negative EBIT margin of -161.3% and a total pre-tax profit margin of -67.1%. Their total revenues were approximately $807M, contributing to a stock price to sales ratio of 0.47, highlighting their undervaluation in the market compared to the tangible market value of roughly $5.58B.

Financial strength is negative due to high debt levels; the total debt to equity is at a staggering 30.66. Yet, the current ratio of 4.6 suggests sufficient current assets to cover liabilities. However, long-term debt of over $6.52B stresses the need for strong future income streams.

More Breaking News

Their asset turnover shows a low rate of 0.1, while the leverage ratio residing at 35.6. All these figures suggest worrying trends for investors. Several key ratios echo challenges: negative cash flow per share, earnings before interest, taxes, depreciation, and amortization are all figures concerne for a restructuring path.

Market Reactions:

Recent developments have had a marked impact on investor sentiment towards Wolfspeed. The news of an impending bankruptcy and restructuring are both stressing confidence levels and compounding challenges for WOLF shares. On Jun 23, 2025, the revelation of an intent to file for Chapter 11 bankruptcy caused significant pre-market activity, with shares tumbling 16%. This decision was accompanied by a restructuring support agreement aimed at significantly reducing Wolfspeed’s debt and cash interest payments but has yet not abated concerns.

The announcement of Apollo Global Management stepping in to expedite bankruptcy proceedings is troubling. This news, dating to Jun 18, 2025, underscored the severity of underlying issues and led to a 32% decline in stock value. Mass coverage of this takeover deal, with creditors expected to take control, highlighted a rapid transition requiring immediate investor attention, prompting a re-evaluation of investment strategies.

Adding further pressure, Wolfspeed’s regretful exit from the S&P SmallCap 600 was painful, necessitating shores up of strategies. This removal, effective by Jun 25, anticipates future instability even as creditors set the course for takeover, leaving Wolfspeed dangling in a fraught landscape characterized by high debts and unclear revenue streams.

Conclusion:

Wolfspeed’s current predicament presents layered complications for industry watchers and stakeholders. From high debt burdens stoking Chapter 11 filings to plummeting market share value, the company’s positioning remains strained. Intense creditor oversight signals rough waters ahead, necessitating robust outcome forecasts.

Traders evaluating Wolfspeed’s position must heed the advice of millionaire penny stock trader and teacher Tim Sykes, who says, “Cut losses quickly, let profits ride, and don’t overtrade.” Dialogue with prospective holds can be hinged on reducing debt and cash interest burdens, but future fiscal return strategies remain critical to stabilize the ship. Tracking trader confidence will indicate broader market trends in the short and long term.

As Wolfspeed stares down the barrel of reorganization, understanding sentiments and trader metrics will continue guiding strategic actions and market responses, reinforcing the need for data vigilance and agile adaptation.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

Dive deeper into the world of trading with Timothy Sykes, renowned for his expertise in penny stocks. Explore his top picks and discover the strategies that have propelled him to success with these articles:

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Ellis Hobbs

Trainer and Mentor on Tim Sykes’ Trading Challenge
He teaches webinars on Tim Sykes’ Trading Challenge He treats trading like a business, not a hobby He emphasizes taking small risks — “If you get the process right, money is a forgone conclusion.”
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”

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