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Financial Turmoil Unfolds as Wolfspeed Anticipates Bankruptcy

Bryce TuoheyAvatar
Written by Bryce Tuohey Reviewed by Matt Monaco Fact-checked by Bryce Tuohey
Updated 7/11/2025, 11:32 am ET 7/11/2025, 11:32 am ET | 5 min 5 min read
Financial Turmoil Unfolds as Wolfspeed Anticipates Bankruptcy Thumbnail

Wolfspeed Inc.’s stocks have been trading down by -10.02 percent amid market uncertainty over leadership changes and future earnings projections.

  • The company’s creditors, featuring Apollo Global Management (APO), are poised to assume control in an expedited bankruptcy process, leading to a 32% share dip.

  • Wolfspeed’s planned bankruptcy filing results in its removal from the S&P SmallCap 600 index, subsequently being replaced by Ralliant Corp.

Candlestick Chart

Live Update At 11:32:05 EST: On Friday, July 11, 2025 Wolfspeed Inc. stock [NYSE: WOLF] is trending down by -10.02%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Financial Overview

Wolfspeed has been on a rocky path recently, highlighted by distress signals in its latest earnings report and key financial metrics. The company’s financial health paints a grim picture, with profitability ratios showing negative figures across the board. The EBIT margin sits at a whopping -161.3%, indicating severe operational inefficiencies. Furthermore, the gross margin of -12.3% highlights the challenge Wolfspeed faces in converting revenue into profit.

Revenue, on the other hand, hints at modest growth but is overshadowed by escalating net losses. With revenue tallying approximately $807.2 million, the organization is still navigating financial turbulence, as manifested in significant free cash flow deficits. To exacerbate the situation, Wolfspeed boasted an unfavorable profitability landscape, with its net income from ongoing operations posting a steep -$285.5 million.

The company’s ambitious attempts to curb debt and interest outlays under its restructuring support agreement come at a crucial time when quick liquidity is vital. Notably, with an enterprise value exceeding $5.4B and a price-to-sales ratio of 0.33, Wolfspeed’s financial footing is anything but stable.

Market Reactions Amid Bankruptcy Talks

The looming Chapter 11 filing is creating ripples in the market, as stakeholders attempt to navigate the turbulent waters. Wolfspeed’s recent decision to restructure, alongside the looming bankruptcy declaration, has not only shaken investor confidence but also signaled a noteworthy turning point for a company grappling with insolvency threats.

As creditors, including influential entities like Apollo Global Management, prepare to take the reins, the market is keenly observing potential future moves. This seems to be a pragmatic approach to salvage whatever remains of Wolfspeed’s assets and raise hopes of a financial rebound in the coming years. Yet, caution abounds, as there are uncertainties regarding the timing and implication of this transition. Investors are left speculating how these measures will sculpt the financial landscape.

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Conclusion

In essence, Wolfspeed’s turbulent journey, characterized by staggering losses and looming bankruptcy, captures the broader narrative of financial distress eclipsing hopes of revitalization. The strategic restructuring efforts, coupled with the anticipated Chapter 11 filing, uncover a telling tale of survival amid uncertainty. Noteworthy creditor interventions reflect a critical moment in Wolfspeed’s timeline, potentially reshaping its standing in the financial space.

The market remains precariously balanced—traders, wary albeit hopeful, await a resolution, while the shifting tides continue to redefine expectations for a beleaguered company fighting to forecast a brighter future. As millionaire penny stock trader and teacher Tim Sykes, says, “Consistency is key in trading; don’t let emotions dictate your trades.” This insight resonates with Wolfspeed’s need to focus not only on recovery but also on maintaining a disciplined approach in its financial strategies. Through the tumultuous fog of bankruptcy, what’s crucial is not just recovery, but the blueprint informing that journey, as Wolfspeed seeks to realign and restore its fiscal destiny.

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.

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Bryce Tuohey

Mentor and Trainer at StocksToTrade.com, Lead Mentor at Small Cap Rockets and To The Moon Report
Bryce’s first pattern was buying into strength in breakouts. But he noticed when they didn’t work, he took bigger losses. When the OTC market got hot, Bryce learned to dip buy the inevitable panics. He adapted his breakout strategy and now buys consolidation and trend breaks. His goal is to have better risk/reward and get an entry before multi-day listed breakouts.
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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”