Wolfspeed: Equity Likely To Be Wiped Out In Bankruptcy - Sell

(6min)

Summary

  • Two weeks ago, debt-laden silicon carbide semiconductor solutions provider Wolfspeed warned investors of a potential bankruptcy filing.
  • On Wednesday, the Wall Street Journal reported that the company is preparing to file for bankruptcy within weeks, thus causing a 60% selloff in the shares in after hours.
  • With $6.65 billion in debt ranking ahead of the common equity, a recovery for shareholders would be highly unlikely.
  • For my part, I would expect unsecured creditors to emerge as the restructured company's new owners, with current equity holders likely being wiped out.
  • Consequently, I am initiating coverage of WOLF with a "Strong Sell" rating.
  • Looking for a helping hand in the market? Members of Value Investor's Edge get exclusive ideas and guidance to navigate any climate. Learn More »
Absteigende rote Graphenlinie, Aktienmarkt und Finanzkrise

ismagilov/iStock via Getty Images

After the close of Tuesday's session, shares of silicon carbide semiconductor solutions provider Wolfspeed, Inc. (NYSE:WOLF) or "Wolfspeed" cratered by more than 60% to new all-time lows after the Wall Street Journal reported that the company is preparing

Massively Outperform in Any Market

Value Investor's Edge provides the world's best energy, shipping, and offshore market research. Over the past decade, we have achieved an annualized return of almost 40%.

We also offer income-focused coverage geared towards investors who prefer lower-risk firms with steady dividend payouts. Our 10-year track record proves the ability of our analyst team to outperform across all market conditions. Join VIE now to access our latest top picks and model portfolios.

image.png

This article was written by

19.98K Followers

I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.

I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.

Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About WOLF Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on WOLF

Related Stocks

SymbolLast Price% Chg
WOLF
--