What's Going On With Wolfspeed Shares Today?

Wolfspeed Inc. WOLF shares plunged over 30% on Monday following reports suggesting the company plans to file for bankruptcy by July 1.

What To Know: According to Bloomberg, the semiconductor manufacturer reached a restructuring support agreement with key creditors, including Renesas Electronics, to reduce its $6.6 billion debt burden by about $4.6 billion. The deal also aims to cut Wolfspeed's annual interest expenses by 60% and give control of the company to convertible noteholders.

The bankruptcy plan, which has been in the works since at least May, comes as Wolfspeed grapples with stalled government funding and policy shifts under the Trump administration.

Although the company previously secured a $750 million award from the CHIPS and Science Act to support its production expansion, it has only received partial funding and remains locked in negotiations with federal officials.

Under the proposed restructuring, Wolfspeed shareholders would retain up to 5% ownership of the reorganized company. The deal includes Renesas converting a $2.1 billion deposit into convertible notes, equity and warrants.

In addition, certain existing noteholders have committed to providing $275 million in new second-lien convertible bonds. Wolfspeed expects to emerge from bankruptcy by the end of the third quarter, pending court approval.

WOLF Price Action: Wolfspeed shares were down 33.2% at 60 cents at the time of publication Monday, according to Benzinga Pro.

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