Should You Buy Wolfspeed Stock Right Now?
(NYSE: WOLF) stock has seen some major changes in the last couple of days. Some investors were jumping for joy when they saw reports that the stock had jumped more than 1,600% yesterday, only to find that when they checked their portfolios, they were down -- a lot. So what's going on?
The struggling chipmaker filed for Chapter 11 bankruptcy protection on June 30 this year after its debt grew unmanageable. The company successfully negotiated a massive reduction of its debt -- about 70%. With its creditors satisfied, on Monday, Wolfspeed announced its "emergence from Chapter 11 protection."
But as you might expect, reducing your debt by that much comes with some pretty hefty strings attached. A key step, which it executed yesterday, was to replace its existing stock with shares of a "new" stock. This new stock would be distributed to both its creditors and its common shareholders, but not evenly.
Source Fool.com
